Question

You are planning on buying $100,000 face value of Australian Commonwealth Government Bonds. The bonds mature...

You are planning on buying $100,000 face value of Australian Commonwealth Government Bonds. The bonds mature on 15 February 2016 and have a coupon rate of 4.75%. If your purchase will settle on 27 April 2012, and the quoted yield for the bond is 5.32%, what is the cash price of the bonds to the nearest dollar?

Homework Answers

Answer #1
Par/Face value 100000
Annual Coupon rate 0.0475
Annual coupon 4750
Present Value = Future value/ ((1+r)^t)
where r is the interest rate that is 5.32% and t is the time period in years.
price of the bond = sum of present values of future cash flows
r 0.0532
mt 1 2 3 4
future cash flow 4750 4750 4750 104750
present value 4510.065 4282.249 4065.941 85135.49
sum of present values 97993.74
The cash price of the bonds to the nearest dollar is $97994.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are planning on buying $100,000 face value of Australian Commonwealth Government Bonds. The bonds mature...
You are planning on buying $100,000 face value of Australian Commonwealth Government Bonds. The bonds mature on 15 February 2016 and have a coupon rate of 4.75%. If your purchase will settle on 27 April 2012, and the quoted yield for the bond is 5.32%, what is the cash price of the bonds to the nearest dollar? assume semi-annual coupon.
A firm has outstanding bond that mature in 15 years. The bonds have a face value...
A firm has outstanding bond that mature in 15 years. The bonds have a face value of $1000, and a coupon rate of 5.2 percent The bonds make semiannual coupon payments. If the market yield on these bonds is 4.2 percent, what is the current bond price? (Round your answer to 2 decimal places. (e.g., 1032.16))
Question 8 The Australian Treasury has issued 9.0-year zero coupon bonds with a face value of...
Question 8 The Australian Treasury has issued 9.0-year zero coupon bonds with a face value of $1,000. Assume that coupon payments are normally semiannual. What will be the current market price of these bonds if the yield for similar investments in the market is 5.3 percent p.a.? (Round to the nearest dollar; do not use $ sign or commas))
An Australian Government bond with a face value of $1,000 and an annual coupon rate of...
An Australian Government bond with a face value of $1,000 and an annual coupon rate of 5.5% matures in seven years, pays interest semi-annually, and has a yield to maturity of 6.2%. What is the price of the bond right after it makes its first coupon payment? a. $947.21 b. $960.73 c. $945.08 d. $963.01
15. In early April 2020 Australian 15-year government bonds were trading at a yield-to-maturity of 1.10%...
15. In early April 2020 Australian 15-year government bonds were trading at a yield-to-maturity of 1.10% p.a., compounding semi-annually. The bonds have a coupon rate of 2.75% p.a., paid semi-annually. Suppose that in one year’s time 15-year Australian Government bonds (also with a coupon rate of 2.75% p.a., paid semi-annually), are trading at a yield-to-maturity of 1.60% p.a., paid semi-annually. The percentage change in the price of 15-year government bonds over this one year will be Select one: a. 6.1%...
In early April 2020 Australian 15-year government bonds were trading at a yield-to-maturity of 1.10% p.a.,...
In early April 2020 Australian 15-year government bonds were trading at a yield-to-maturity of 1.10% p.a., compounding semi-annually. The bonds have a coupon rate of 2.75% p.a., paid semi-annually. Suppose that in one year’s time 15-year Australian Government bonds (also with a coupon rate of 2.75% p.a., paid semi-annually), are trading at a yield-to-maturity of 1.60% p.a., paid semi-annually. The percentage change in the price of 15-year government bonds over this one year will be Select one: a. 3.1% b....
Bond A has a face value of $1,000, makes semiannual coupon payments of $30 and will...
Bond A has a face value of $1,000, makes semiannual coupon payments of $30 and will mature in 7 years. It currently sells for $949.63. Bond B is a corporate bond whose price is quoted at 109.98 this afternoon. It will mature in exactly 15 years. Bonds A and B are priced so that they each have the same yield. What is the YTM for these two bonds, and what is the coupon rate for Bond B?
The $1,000 face value bonds of Country Home, Inc. have coupon of 5.0 percent and pay...
The $1,000 face value bonds of Country Home, Inc. have coupon of 5.0 percent and pay interest semiannually. Currently, the bonds are quoted at 112.15 and mature in 15 years. What is the yield to maturity?
On 1 April 2020, the AOFM issued seven-year Government fixed-interest bonds with a face value of...
On 1 April 2020, the AOFM issued seven-year Government fixed-interest bonds with a face value of $25 million, paying half-yearly coupons at 6.50 per cent per annum. Coupons are payable on 31 March and 30 September each year until maturity. On 15 September 2022, the holder of the bonds sells at a current yield of 6.75 per cent per annum. You are required to calculate: n (number of periods) i  (current yield) C (coupon payment) k (fraction of elapsed interest period...
new markets has 1,000 face value bonds outstanding that pay interest semi annually, mature in 14.5...
new markets has 1,000 face value bonds outstanding that pay interest semi annually, mature in 14.5 years and have a 4.50% coupon. the current price is quoted at 97.60% of par. what is the yield to maturity? Please show step by step how to solve using financial calculator, BA 2 plus.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT