Question

The market price of a bond is $900 for a 10-year bond that pays interest semi-annually at a coupon rate of 6% per annum. What is the bond’s expected return, stated on an annual basis compounded semi-annually? What is the bond’s expected return, stated on an annual basis compounded annually? Show steps on how to solve using excel and the formulas used as well as manually how to solve it

Answer #1

Bond’s expected return, stated on an annual basis compounded semi-annually is calculated in excel and screen shot provided below:

Bond’s expected return, stated on an annual basis compounded semi-annually is 7.435%.

Bond’s expected return, stated on an annual basis compounded annually is calculated in excel and screen shot provided below:

Bond’s expected return, stated on an annual basis compounded annually is 7.45%.

Bank of America has bonds that have a 6.5% coupon, payable
annually, and mature in 5 years. If an investor has a required rate
of return of 4.3% per annum, compounded annually, what is the price
of the bond? What happens to the return if the investor pays more
or less than the amount calculated? Show steps of how to solve
using excel including the formulas and manually

1. A First State Bank savings account pays interest
semi-annually with an effective annual rate of 4.4%. What is the
stated or nominal interest rate the bank is offering?
2. An 8-year semi-annual payment coupon bond, $1,000 face, has
an expected return of 4% and a coupon of 6%. What is the bond’s
current yield?
3. You purchase a 4-year, 4% coupon bond for par. Interest is
paid annually. One year later, you sell the bond for $1,100. What
is your...

A 7 year maturity corporate bond has coupon rate of 7% and pays
coupon semi-annually. Considering Par value of $1000, what would be
the bond price if Effective Annual Yield is 10%?
Please explain all steps, Thanks!

A 15-year bond is currently priced at $900 and pays a
semi-annual coupon payment of 8%. The par value is $1,000. What is
the yield to maturity?

Mr. Simpson buys a $1000 semi-annual coupon bond paying interest
at 6.8%/year compounded semi-annually and redeemable at par in 12
years. Mr. Simpson's desired yield rate is 9.8%/year compounded
semi-annually. How much did he pay for the bond?

Suppose an investor can purchase a 20 year, 5% coupon bond that
pays interest semi annually and the price of the bond is 97%. The
Par Amount is $100. The yield to maturity is 5.95%. Assume the
investor can reinvest the coupon payments at an annual rate of 3%.
The bond is only held for 5 years and sold at 89%. Compute the
following:
What is the Total Coupon plus Interest on Interest in
Dollars?
What is the (Total Interest...

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)

On January 1 a company issues a $75,000 bond that pays interest
semi-annually. The first interest payment of $1,875 is paid on July
1. What is the stated annual interest rate on the bond?
5.00%
2.50%
1.25%
10.00%
On October 1 a company sells a 3-year, $2,500,000 bond with an
8% stated interest rate. Interest is paid quarterly and the bond is
sold at 89.35. On October 1 the company would collect ________.
$200,000
$558,438
$2,233,750
$6,701,250

5. A bond that yields 6% pays a coupon of $20 semi-annually.
Which of the following is most likely the price of the bond?
6. What is the coupon rate for the bond? Assume semi-annual
payments. Answer as a percent!
Bond
Coupon Rate
Yield
Price
t
Apple B
?
5.1%
1012.5
14
semi annual means 6 months.

Mr. Simpson buys a $1000 semi-annual coupon bond paying interest
at 11.3%/year compounded semi-annually and redeemable at par in 16
years. Mr. Simpson's desired yield rate is 14.3%/year compounded
semi-annually. After 9 years he sells the bond. Interest rates have
dropped and the bond is sold to yield a buyer 12.8%/year compounded
semi-annually. Determine the sale price.

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