Question

A 12-year annual payment corporate bond has a market price of $925. It pays annual interest of $60 and its required rate of return is 7 percent.By how much is the bond mispriced?

An eight-year corporate bond has a 7 percent coupon rate. What should be the bond's price if the required return s 6 percent and the bond pays interest semiannually?

step by step please

Answer #1

**Answer to First
Question**

Price Bond of the Bond = Present Value of coupon payments + Present Value of Par value

= $60 x [ PVIFA 7%, 12 Years] + $1,000 x [ PVIF 7%, 12 Years]

= [ $60 x 7.942686 ] + [ $1,000 x 0.444011 ]

= $476.56 + 444.01

= $920.57

**The Bond is mispriced by $4.43 [ $925 – 920.57
]**

**Answer to Second
Question**

Price Bond of the Bond = Present Value of coupon payments + Present Value of Par value

= $35 x [ PVIFA 3%, 16 Years] + $1,000 x [ PVIF 3%, 16 Years]

= [ $35 x 12.56110 ] + [ $1,000 x 0.623167]

= $439.64 + 623.17

= $1,062.81

**“ Bond Price = $1,062.81 “**

You bought a 5-year annual payment
corporate bond with a market price of $1000. The bond pays annual
interest of $100, by how much your bond is mispriced if
The required rate of return on your investment is 10%?
The required rate of return on your investment is 12%?

A 10-year annual payment corporate bond has a market price of
$1,050. It pays annual interest of $100 and its required rate of
return is 9 percent. Is the bond fairly priced, underpriced, or
overpriced? Also find the magnitude of the mispricing (if any).
please explain how you get all the numbers in excel would be
good

A six-year annual payment corporate bond has a required return
of 9.5 percent and an 8 percent coupon. Its market value is $20
over its PV. the bond's E(r)?
A corporate bond returns 12 percent of its cost (in PV terms) in
the first year, 11 percent in the second year, 10 percent in the
third year and the remainder in the fourth year. What is the bond's
duration in years? step by step please

The market price is $725 for a 12 -year bond ($1,000 par
value) that pays 12 percent annual interest, but makes interest
payments on a semiannual basis (6 percent semiannually). What is
the bond's yield to maturity?
The bond's yield to maturity is?.
(Round to two decimal places.)

The market price is $975 for a 14-year bond ($1000 par
value) that pays 9 percent interest (4.5 percent semiannually).
What is the bond's expected rate of return? The bond's expected
annual rate of return is?

A bond's market price is $925. It has a $1,000 par value, will
mature in 10 years, and has a coupon interest rate of 9 percent
annual interest, but makes its interest payments semiannually. What
is the bind's yield to maturity? What happens to the bond's yield
to maturity if the bond matures in 20 years? What if it matures in
5 years?
The bond's yield to maturity if it matures in 10 years is ___%
(round to two decimal...

4.
A nine-year REl corporate bond has a 7% coupon rate. What is the
current market price of the bond if the expected return is 6.9% and
the required rate of return is 6% and the bond pays interest
semiannually? Round to three decimal places and omit the dollar
sign ($) .

A(n) 15-year bond for Rusk Corporation has a market price of $
750 and a par value of $ 1000. If the bond has an annual interest
rate of 7 percent, but pays interest semiannually, what is the
bond's yield to maturity? The bond's yield to maturity is
___%.

An eight-year annual payment 7 percent coupon Treasury bond has
a price of $1,065. The bond's annual E(r) must be
13.49 percent.
5.80 percent.
7.00 percent.
5.96 percent.
1.69 percent.

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?

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