Question

Consider the following three bonds which you bought today at the listed purchase prices. Bond A:...

Consider the following three bonds which you bought today at the listed purchase prices.

Bond A: Purchase price $15,000 with Face Value of $20,000 in 1 years.

Bond B: a perpetuity has a price of $1250 and an annual coupon payment of $25

Bond C: Purchase price of $15000, Face Value of $20,000 in 10 years and pays annual coupon payments of $25

Assume 1 year from now you want to sell these bonds: For each of these bonds calculate price after 1 year and the Holding period Return if interest rate after 1 year is 5%

Homework Answers

Answer #1


PLS UPVOTE MY ANSWER

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
One year ago, you bought a bond at a price of $992.6000.The bond pays coupons semi-annually,...
One year ago, you bought a bond at a price of $992.6000.The bond pays coupons semi-annually, has a coupon rate of 6% per year, a face value of $1,000 and would mature in 5 years. Today, the bond just paid its coupon and the yield to maturity is 8%. What is your holding period return in the past year? (suppose you did not reinvest coupons)
A bond trader bought each of the following bonds at a yield to maturity of 8...
A bond trader bought each of the following bonds at a yield to maturity of 8 percent. Few weeks after the purchase of the bonds, interest rates fell to 7 percent. Maturity Coupon Price at 8% Price at 7% Percentage Change 10-year 10% annual coupon 10-year zero 5-year zero 30-year zero $100 perpetuity Required: Complete missing information int he above table
You just bought a newly issued bond which has a face value of $1,000 and pays...
You just bought a newly issued bond which has a face value of $1,000 and pays its coupon once annually. Its coupon rate is 5%, maturity is 20 years and the yield to maturity for the bond is currently 8%. Do you expect the bond price to change in the future when the yield stays at 8%? Why or why not? Explain. (No calculation is necessary.) 2 marks) Calculate what the bond price would be in one year if its...
a) You are considering investing in bonds and have collected the following information about the prices...
a) You are considering investing in bonds and have collected the following information about the prices of a 1-year zero-coupon bond and a 2-year coupon bond. - The 1-year discount bond pays $1,000 in one year and sells for a current price of $950. - The 2-year coupon bond has a face value of $1,000 and an annual coupon of $60. The bond currently sells for a price of $1,050. i) What are the implied yields to maturity on one-...
You bought a bond exactly one year ago for $1,004.50. Today, you sold the bond at...
You bought a bond exactly one year ago for $1,004.50. Today, you sold the bond at a price of $987.40. The bond paid interest semi-annually at a coupon rate of 6%. What is your holding period yield on this bond?
26. 5 years ago, you bought a Ford bond. At the time of the purchase, the...
26. 5 years ago, you bought a Ford bond. At the time of the purchase, the bond had a coupon rate of 8% paid semiannually, a par value of $1,000, and a time to maturity of 25 years. What is the expected price of the bond today if the interest rate is 12%? Select one: a. $701.65 b. $699.07 c. $697.43 d. 703.87
Suppose that the prices today of zero-coupon bonds with various maturities are in the following table....
Suppose that the prices today of zero-coupon bonds with various maturities are in the following table. The face value of every bond is $1,000. Maturity in years Price 1 925.93 2 853.39 3 782.92 4 715.00 5 650.00 Calculate the one-year forward rate of interest for every year. Suppose that today you buy one 3-year maturity zero coupon bond. How many 5-year maturity zeros would you have to sell to make What are the cash flows from the strategy in...
Given the purchase prices, coupons and maturities of four bonds, calculate the yields to maturity to...
Given the purchase prices, coupons and maturities of four bonds, calculate the yields to maturity to you, the investor. Assume a $1,000 par value. Bonds A, B, and C are semi-annual. Bond D is a zero but calculate its yield with a semi-annual equivalency. Provide your answers to 4 significant digits (example: 6.1234%) Bond A Price 984.00, annual coupon 3%, maturing in 2 years Bond B Price 799.00, annual coupon 6%, maturing in 5 years Bond C Price 767.00, annual...
A zero-coupon bond is a security that pays no interest, and is therefore bought at a...
A zero-coupon bond is a security that pays no interest, and is therefore bought at a substantial discount from its face value. If the interest rate is 8% with annual compounding how much would you pay today for a zero-coupon bond with a face value of $2,500 that matures in 6 years? Please round your answer to the nearest cent.
Consider two bonds: bond XY and bond ZW . Bond XY has a face value of...
Consider two bonds: bond XY and bond ZW . Bond XY has a face value of $1,000 and 10 years to maturity and has just been issued at par. It bears the current market interest rate of 7% (i.e. this is the yield to maturity for this bond). Bond ZW was issued 5 years ago when interest rates were much higher. Bond ZW has face value of $1,000 and pays a 13% coupon rate. When issued, this bond had a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT