Question

A Treasury bond with 12 years to maturity is currently quoted at 112:12. The bond has...

A Treasury bond with 12 years to maturity is currently quoted at 112:12. The bond has a coupon rate of 10.7 percent. What is the yield value (IN BASIS POINTS) of a 32nd for this bond?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #2
Face value $100
Coupen annually 10.70%
Coupen amount $10.70
Maturity 12 years
Bond Price $112.12
YTM :
Price of bond = Coupen * PVAF( YTM, Maturity) + Redemption value * PVF( YTM,Maturity)
Here bond price is more than face value hence YTM be less than Coupen rate
Therefore lets assume YTM be 9%
Price of bond = 10.70*PVAF(9%,12) + 100*PVF(9%,12)
10.70*7.160+100*.355
$ 112.112

it is closes to $112.12 therefore YTM = 9%

answered by: anonymous
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
A Treasury bond with 8 years to maturity is currently quoted at 108:16. The bond has...
A Treasury bond with 8 years to maturity is currently quoted at 108:16. The bond has a coupon rate of 11.5 percent. What is the yield value of a 32nd for this bond? (Do not round intermediate calculations. Round your answer to 3 decimal places.)               Yield value (in basis points)
A Treasury bond with the longest maturity (30 years) has an ask price quoted at 105.4375....
A Treasury bond with the longest maturity (30 years) has an ask price quoted at 105.4375. The coupon rate is 3.40 percent, paid semiannually. What is the yield to maturity of this bond?
1. A Treasury note has 9 years till maturity is quoted at 96:17 with a 4.25%...
1. A Treasury note has 9 years till maturity is quoted at 96:17 with a 4.25% coupon. The bond pays interest semiannually. What is the yield to maturity on the bond? 2. Radio Shack needs to raise $4.75 million for an expansion project. The firm wants to raise this money by selling zero coupon bonds with a par value of $1,000 that mature in 15 years. The market yield on similar bonds is 6.85 percent. How many bonds must The...
A Treasury bond is quoted with a price of 96-14. It has a coupon of 2.25%...
A Treasury bond is quoted with a price of 96-14. It has a coupon of 2.25% and a final maturity of 4/15/45 (and coupon payment dates of 4/15 and 10/15). The bond trades at that price on 12/7/16 on a regular way basis. The face amount of the transaction is $10 million. What is the settlement date? AND What is the yield to maturity?
a. A Treasury issue is quoted at 103.88545 bid and 103.935 ask. Assume a face value...
a. A Treasury issue is quoted at 103.88545 bid and 103.935 ask. Assume a face value of $1,000. What is the least you could pay to acquire a bond? Price b. A Treasury bond with the longest maturity (30 years) has an ask price quoted at 104.4375. The coupon rate is 3.60 percent, paid semiannually. What is the yield to maturity of this bond? yield to maturity: %
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...
XZYY, Inc. currently has an issue of bonds outstanding that will mature in 23 years. The...
XZYY, Inc. currently has an issue of bonds outstanding that will mature in 23 years. The bonds have a face value of $1,000 and a stated annual coupon rate of 10% with semi-annual coupon payments. The bond is currently selling for $1151. The bonds may be called in 5 years for 112% of par value. What is the quoted annual yield-to-maturity for these bonds? 8.89% 4.25% 8.50% 8.24% 7.81%
An semi-annual coupon bond with a $2,000 face value matures in 4 years. The bond currently...
An semi-annual coupon bond with a $2,000 face value matures in 4 years. The bond currently sells for $1627.412 and has a 12 percent yield to maturity. What is the bond’s nominal coupon rate?
QUESTION 27 What is the time to maturity (in years) on a bond? The bond currently...
QUESTION 27 What is the time to maturity (in years) on a bond? The bond currently sells for $1,189.08, pays semiannual coupon payments with a coupon rate of 10%, has a yield to maturity of 8%, has a par value of $1,000. 9 36 18 20 40
A bond with a coupon of 11.5% and 10 years remaining until maturity has a modified...
A bond with a coupon of 11.5% and 10 years remaining until maturity has a modified duration of 6.48 and convexity of 63. The bond is quoted at $115.75. If the required yield rises by 145 basis points, determine the predicted price of the bond. Please show work!
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT