Question

An 8% semiannual coupon bond matures in 5 years. The bond has
a face value of $1,000 and a current yield of 8.2761%.

What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.

$

Answer #1

Price of bond is equal to present value of coupon payments plus present value of par value. | ||||||||

We have the following information | ||||||||

Semi annual coupon rate | 4% | 8%/2 | ||||||

Semi annual coupon amount | 40 | 1000*4% | ||||||

Face value | 1000 | |||||||

Semi annual current yield | 4.13805% | 8.2761%/2 | ||||||

Number of payments | 10 | 5*2 | ||||||

Price of bond = 40*PVAD(i=4.13805%,n=10)+1000*PV(i=4.13805%,n=10) | ||||||||

Price of bond = 40*PVIFA(i=4.13805%,n=10)+1000*(1/(1.0413805^10)) | ||||||||

Price of bond = 40*8.05544+1000*0.6666618 | ||||||||

Price of bond | $988.88 | |||||||

Calculation of PVAD | ||||||||

PVAD = (1-(1+r^-N)/r | ||||||||

PVAD = (1-(1.0413805^-10))/0.0413805 | ||||||||

PVAD | 8.05544 | |||||||

Therefore the price of bond is $988.88, it is below the par
value since coupon rate is below the yield to
maturity. |
||||||||

An 8% semiannual coupon bond matures in 5 years. The bond has a
face value of $1,000 and a current yield of 8.3765%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 7 for the
definition of the current yield and to Table 7.1.) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

An 8% semiannual coupon bond matures in 4 years. The bond has a
face value of $1,000 and a current yield of 8.1793%.
A. What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.
B. What is the bond's YTM?

A 7% semiannual coupon bond matures in 5 years. The bond has a
face value of $1,000 and a current yield of 7.4352%.
a. What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.
b. What is the bond's YTM? Do not round intermediate
calculations. Round your answers to two decimal places.

An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.3356%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.

An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.1436%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.3977%. What are the
bond's price and YTM? (Hint: Refer to Footnote 6 for the definition
of the current yield and to Table 7.1) Do not round intermediate
calculations. Round your answer for the bond's price to the
nearest cent and for YTM to two decimal places.
Bond’s price: $ =
YTM: =

A 7% semiannual coupon bond matures in 4 years. The bond has a
face value of $1,000 and a current yield of 7.5452%.
What is the bond's price? Do not round intermediate
calculations. Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 7 for the
definition of the current yield and to Table 7.1.) Do not round
intermediate calculations. Round your answers to two decimal
places.

A 7% semiannual coupon bond matures in 4 years. The bond has a
face value of $1,000 and a current yield of 7.5146%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

A 7% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 7.7535%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 6 for the
definition of the current yield and to Table 7.1) Do not round
intermediate calculations. Round your answers to two decimal
places.
%

PRICE AND YIELD
An 8% semiannual coupon bond matures in 6 years. The bond has a
face value of $1,000 and a current yield of 8.4446%.
What is the bond's price? Do not round intermediate calculations.
Round your answer to the nearest cent.
$
What is the bond's YTM? (Hint: Refer to Footnote 7 for the
definition of the current yield and to Table 7.1.) Do not round
intermediate calculations. Round your answers to two decimal
places.

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 10 minutes ago

asked 21 minutes ago

asked 28 minutes ago

asked 28 minutes ago

asked 42 minutes ago

asked 46 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago