Question

48. An investor purchased a $1000 face value bond for $925. The bond has an 8 percent coupon rate, paid annually, and matures in five years. The investor sold the bond one year later for $965, while the price level was increasing at 5 percent. Calculate the pre-tax real realized rate of return on the investment?

a. -.7%

b. 8%

c. 3%

d. 5%

Answer #1

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You purchased a bond for $925 The bond has a coupon rate of 8
percent, which is paid semiannually. It matures in 14 years and
has a par value of 1000 . What is your expected rate of return?
Your expected rate of return is ?

An investor is considering the purchase of a $1000 par value
bond with an 8% coupon rate (with interest paid semiannually) that
matures in 5 years. If the bond is priced to yield 6%. What is the
bonds current price?

A company has a 10% bond that has a face value of $1000 and
matures in 10 years. Assume that coupon payments are made
semi-annually. The bonds can be called after 5 years at a premium
of 5% over face value. What is the value of the bond if rates drop
immediately to 8%?

7. Pablo just purchased a bond for $1,024.75. The bond has a
face value of $1,000 and a 10 percent coupon rate, with coupon
interest paid annually. Pablo’s broker told him that the yield to
maturity on this bond is 9.5%; however, the broker did not tell him
when the bond would mature. Calculate how many years this bond has
left until it matures.

A bond has a coupon ate of 10%, a 1000$ face value, matures in 5
years, has a yield of maturity of 15% percent and pays interest
annually. What is the current yield?

A bond has a face value $1000, maturity of 10 years, and a
coupon rate of 8%, paid semi-annually. Assuming the
yield-to-maturity is 10%, the current price of the bond is:

An investor has two bonds in his portfolio that have a face
value of $1000 and pay a 10% annual coupon. Bond A matures 20 years
and Bond B matures in 5 years.
a) Estimate the value of each bond if the required return is
9%
b)Estimate the value of each bond of the required return is
11%.
(Please explain the answer in detail, thank you)

Investor A has just sold a ten-year $10,000 corporate bond to
Investor B for $8,500. Investor A purchased the bond four years ago
for $9,500. The bond coupon rate is 8 percent per year paid
annually and Investor A has just received the dividend for year
4.Investor B has a MARR of 10% per year compounded semi-annually.
Will the return on the corporate bond meet the Investor B’s
MARR?

1. A semiannual coupon bond with a coupon rate of 7% and face
value of $1000 trades at $1250. It matures in 12 years. What is its
yield to maturity (YTM)? Answer in percent and round to two decimal
places.
2. A 5 year semiannual coupon bond with a face value of $1,000
trades at $902. The market-determined discount rate is 7%. What is
the coupon rate? Answer in percent and round to two decimal
places.

An investor purchased a bond for $550 that has the following
cash flows: the principal is $600, over n = 5 years the bond will
pay 8% coupon annually. Find the IRR of these cash flows (also
called Yield to Maturity):Note: the principal is the amount that a
bond pays at the end of its maturity (5-th year in this case) and
the coupon is just a periodic payment equal to “coupon rate” *
“Principal” (0..08*600 = $48 in this...

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