Question

A Treasury bond has a face value of $10,000, a coupon of 8%, and several years...

A Treasury bond has a face value of $10,000, a coupon of 8%, and several years to maturity. Currently this bond sells for $9,260, and the previous coupon has just been paid. What is the forward price for delivery of this bond in 1 year? Assume that the interest rates for 1 year out are flat at 9% semiannually compounded. The T Bond pays coupons semi-annually. If the forward is trading in the market for $9,500 what will you do?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

ANSWER IN THE IMAGE. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

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
The U.S. Treasury has just issued a five-year, $1000 (face value) bond with a coupon rate...
The U.S. Treasury has just issued a five-year, $1000 (face value) bond with a coupon rate of 5% and paying semi-annual coupons. The bond is currently trading at 957.35. Calculate the YTM on the bond. NOTE: This is a coupon bond. Please show all work
(a)       Consider a 14-year, 9.5% corporate bond with face value $10,000. Assume that the bond pays...
(a)       Consider a 14-year, 9.5% corporate bond with face value $10,000. Assume that the bond pays semi-annual coupons. Compute the fair value of the bond today if the nominal yield-to-maturity is 11% compounded semi-annually. (b)       Consider a 11-year, corporate bond with face value $1,000 that pays semi-annual coupon. With the nominal yield-to-maturity equal to 10%, the bond is selling at $802.5550. Find the coupon rate for this bond. Assume that the market is in equilibrium so that the fair value...
a) A treasury STRIPS with 13 years until maturity has a face value of $10,000.   It’s...
a) A treasury STRIPS with 13 years until maturity has a face value of $10,000.   It’s trading at a price of $4,131. What’s the YTM of the STRIPS? b) Suppose the real rate is 2% and the inflation is currently at 2.5%.   What will you expect the yield on the treasury bills?   c) A coupon bond with 5 years to maturity has a face value of $1,000 and a coupon of $40 a year.   It’s trading at a price of...
Consider a 14-year, 9.5% corporate bond with face value $10,000. Assume that the bond pays semi-annual...
Consider a 14-year, 9.5% corporate bond with face value $10,000. Assume that the bond pays semi-annual coupons. Compute the fair value of the bond today if the nominal yield-to-maturity is 11% compounded semi-annually. Please show working
Acme Inc. just issued a bond with a​ $10,000 face value and a coupon rate of​...
Acme Inc. just issued a bond with a​ $10,000 face value and a coupon rate of​ 7%. If the bond has a life of 30​ years, pays semi−annual coupons, and the yield to maturity is​ 9%, what will the bond sell​ for?
A corporate bond has 17 years to maturity, a face value of $1,000, a coupon rate...
A corporate bond has 17 years to maturity, a face value of $1,000, a coupon rate of 5.3% and pays interest semiannually. The annual market interest rate for similar bonds is 3.2% and is quoted as a semi-annually compounded simple interest rate, i.e 1.6% per 6-month period. What is the price of the bond?
Q2: A corporate bond has 22 years to maturity, a face value of $1,000, a coupon...
Q2: A corporate bond has 22 years to maturity, a face value of $1,000, a coupon rate of 5.2% and pays interest semiannually. The annual market interest rate for similar bonds is 3.3% and is quoted as a semi-annually compounded simple interest rate, i.e 1.65% per 6-month period. What is the price of the bond?
a 10-year bond, $1,000 face value bond with a 8% coupon rate and semi-annual coupons has...
a 10-year bond, $1,000 face value bond with a 8% coupon rate and semi-annual coupons has a yield to maturity of 12%. the bond should be trading at the price of? round to nearest cent
A bond has a face value of $1000 with a time to maturity ten years from...
A bond has a face value of $1000 with a time to maturity ten years from now. The yield to maturity of the bond now is 10%. a) What is the price of the bond today, if it pays no coupons? b) What is the price of the bond if it pays annual coupons of 8%? c) What is the price today if pays 8% coupon rate semi-annually?
A bond with a $1,600 face value and 13 years remaining until maturity pays a coupon...
A bond with a $1,600 face value and 13 years remaining until maturity pays a coupon rate of 8.25% compounded semi-annually. Calculate the yield to maturity if the bond is priced at $1,280.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT