Question

For a twenty-year $10,000 bond with a coupon rate of 5%, what is the market value...

For a twenty-year $10,000 bond with a coupon rate of 5%, what is the market value when the interest rate is 5.5% and ten years remaining?


The answer is $3768.81+$5854.31=$9623.12 but I don't know how to reach there.


Please help me

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
For a twenty-year $10,000 bond with a coupon rate of 5%, what is the market value...
For a twenty-year $10,000 bond with a coupon rate of 5%, what is the market value when the interest rate is 5.5% and ten years remaining? The answer is $3768.81+$5854.31=$9623.12 but I don't know how to reach there.
You are selling a 30-year coupon bond with a par value of $10,000 and a coupon...
You are selling a 30-year coupon bond with a par value of $10,000 and a coupon rate of 8% that has 8 years remaining until it matures. If current interest rates are 7%, a. (5 points) Calculate the price of your bond on the secondary market b. (8 points) Calculate your total return. Did you experience a capital gain or loss?
A 12-year, 5% coupon bond pays interest annually. The bond has a face value of $1,000....
A 12-year, 5% coupon bond pays interest annually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield rises to 6% from the current level of 5.5%? I want to make sure that i am doing this correctly. I got -4.26%, am i correct? If not can you give me a step by step process on how to find the answer?
5. Suppose this year you buy 1.5% coupon rate, $10,000 face value bond for $10,100 that...
5. Suppose this year you buy 1.5% coupon rate, $10,000 face value bond for $10,100 that has 3 years left till maturity. Suppose next year market interest rates increase to 2.0% and you decide to sell it your bond that year. a) Calculate the selling price of your bond next year. In another words, what price would make your bond competitive when market yields are at 2.0%? b) Given the selling price from part (a), what was your annual rate...
What is the price of a twenty-year bond if the YTM is 7%, has a coupon...
What is the price of a twenty-year bond if the YTM is 7%, has a coupon rate of 6.8%, and it has ten years left to maturity?
Consider a bond paying a coupon rate of 8% per year semiannually when the market interest...
Consider a bond paying a coupon rate of 8% per year semiannually when the market interest rate is only 5%. The bond has twenty years until maturity. Find the bond’s price today. Find the bond’s price six months from now after the next coupon is paid if the interest rate rises to 7%. What is the total rate of return on the bond?
A five-year corporate bond with a face value of $10,000 pays interest at a coupon rate...
A five-year corporate bond with a face value of $10,000 pays interest at a coupon rate of 5.0%. The required return for investing in this bond is 4.0%. At what market price will the bond sell if the interest is paid semi-annually?
Suppose that you bought a four year coupon bond with $10,000 face value, 6% coupon rate...
Suppose that you bought a four year coupon bond with $10,000 face value, 6% coupon rate and 7% yield to maturity. After holding it for a year and collecting the first coupon payment you decide to sell it. Calculate the return (in %) on this investment if the interest rate has just dropped to 5%. With Formula's Please
A 9% annual coupon bond with twenty years remaining to maturity is selling at $1,098.13. a....
A 9% annual coupon bond with twenty years remaining to maturity is selling at $1,098.13. a. What is the market interest rate on similar bonds?   b. What is the duration of this bond? c. Suppose the market interest rate increases by 1%. What would the investors be willing to pay for the bond now?
You intend to purchase a 5-year, $3,000 face value bond. The coupon rate of this bond...
You intend to purchase a 5-year, $3,000 face value bond. The coupon rate of this bond is 12%. If your nominal annual required rate of return (nominal market interest) is 10 percent and the bond pays coupon semiannually, how much should you be willing to pay for this bond at the end of the second year? (Answer is rounded)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT