Assume that you purchased an 8 percent, 20-year, $1,000 par, semiannual payment bond priced at $1,012.50 when it has 12 years remaining until maturity. Compute: a. Its promised yield to maturity
Q: On January 1, 2020, Company H issues a $20,000,000 bond with a 9% coupon rate. The bond has a…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: A 1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be…
A: Par value = 1500 Years to maturity = 10 Years Coupon rate = 15% Coupon amount = 1500*0.15 = 225…
Q: An investor purchased a 15-year bond with semiannual coupons, redeemable at par, for a price of…
A:
Q: A twenty-year $1,000 bond with semiannual coupons is redeemable at par and has a nominal coupon rate…
A: Purchase price of bond will be the present value of coupon amounts and maturity value.
Q: Compute the intrinsic value of an 18% coupon, a 4-year maturity bond whose principal will be repaid…
A: Intrinsic value is the present value
Q: A 10 – year bond with face amount 10,000 that redeems for 12,000 and that pays semiannual coupons…
A: Answer- Option (A) The bond price is purchased at 9226.
Q: Assume a company-issued bond with 4,000 OMR face value in the muscat security market with 0.154…
A: Given: Face value = 4,000 Coupon rate = 15.4% YTM = 8% Years = 12
Q: The Pioneer Petroleum Corporation has a bond outstanding with an $80 annual interest payment, a…
A: Annual coupon payment (C) = $ 80 Market price (P) = $ 900 Par value (F) = $ 1,000 Years to maturity…
Q: A P1,000 bond which will mature in 10 years and with a bond rate of 8% payable annually is to be…
A: Face value (F) = P 1000 n = 10 years Coupon = 8% of 1000 = P 80 Let r = YTM
Q: Find the bond premium and purchase price on a P2,000 bond with interest at 2% compounded…
A: To calculate the bond price we will use below formula Bond price = [FV*(1+r)-n]+[C*{1-(1+r)-n}/r]…
Q: Compute the intrinsic value of an 18% coupon, a 4-year maturity bond whose principal will be repaid…
A: Intrinsic value is calculated by present value of cash flows. Present value of cash flows = Cash…
Q: A 20,000, 1 ½% bonds with annually coupons are priced to yield 4 ½% converted annually. If it is…
A: Face value = 20,000 Coupon rate = 1.50% Yield rate = 4.50% Redemption to face value ratio = 104%…
Q: Using annual compounding, find the yield to maturity for each of the following bonds. Assume a…
A: Bonds are the agreement between lender and borrowers for the purpose of arrangement of capital.…
Q: 7. Assume that you purchased an 8 percent, 20-year, $1,000 par, semiannual payment bond priced at…
A: Bonds are the debt instrument which are generally issued at fixed interest. Some bonds have a…
Q: P1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be…
A: The given problem can be solved using RATE function in excel. RATE function computes yield to…
Q: Compute the present value for each of the following bonds: a. Priced at the end of its fifth year, a…
A: A bond is a financial instrument issued by large business organizations and governments to raise…
Q: A 15,000, 5 ½% bonds with quarterly coupons is priced to yield 4 ½% converted quarterly. If it is…
A: The question is based on the concept of Bond valuation and pricing. The price of a bond is…
Q: A bond with 18 years to maturity has an annual interest payment of $30. If the bond sells for its…
A: Let the face value be $1000 therefore price of the bond =$1000 using excel rate function current…
Q: Analyze the 20-year, 8% coupon rate (semi-annual payment), $1,000 par value bond. The bond currently…
A: Here, Given information Time Period =20 years Semi -annual coupon rate = 8%/2= 4%(As period is semi…
Q: Assume that you purchase a five-year, $1,000 par value bond, with a 6 percent coupon and a yield of…
A: Calculating the current price of the bond. We have,Current price of bond = C [1 – (1 / (1+r)n ] / r…
Q: Assume that you purchased an 8 percent, 20-year, $1,000 par, semiannual payment bond priced at…
A: We can find the yield using the RATE function of excel.Payment frequency = semi annual; Hence,…
Q: A bond with 11 years to maturity has an annual interest payment of $50. If the bond sells for its…
A: Current yield represents the return earned on a bond in a year. Current yield is expressed in…
Q: Compute the yield to maturity of a 19% coupon purchased for a 970₺ three-year bond whose principal…
A: Bond is the long-term fixed security instrument. The income payment paid on the bonds is fixed…
Q: A $200,000, 6.50% bond redeemable at par, with semi-annual coupon payments, is purchased 12 years…
A: Bond Purchase Price: The present discounted value of a future cash stream provided by a bond is…
Q: What is the Macaulay duration of a semiannual-pay 7.39 percent coupon bond with 12 years to maturity…
A: Here, To Find: Macaulay Duration =?
Q: t20 years, find the coupon payment, redemption value, purchase price and bond premium. (Bond…
A: The given problem can be solved using PV function in excel. PV function computes current price for…
Q: Compute the present value for each of the following bonds a. Priced at the end of its fifth year, a…
A: To Find: Present Value of Bonds
Q: Compute the yield to maturity of a 4-year maturity 16% bond purchased at 975 ₺, whose nominal value…
A: Information Provided: Term = 4 years Coupon rate = 16% Price = $975 Face value = $1000
Q: An 8% annual bond with a par value of $1,000, fifteen years to maturity, and a current price of $850…
A: Par value = $1000 Coupon rate = 8% Coupon amount = 1000*0.08 = $ 80 Years to maturity = 15 Years…
Q: A 25-year Treasury bond has a face value of $1,000, price of $1,400 with a $40 coupon payment.…
A: Face Value = 1000 Price = 1400 Coupon = 40 Price after one year = 1300
Q: David Palmer identified the following bonds for investment: BondA:…
A: Let's find the value of Bond B Face value of bond $10,00,000. As the bond is semi-annual coupon…
Q: ond has face value £100, coupon rate 10% paid semi-annually and maturity 15 years. The bond can be…
A: Price of bond is present value of the coupon payment and present value of the par value of bond.
Q: The 7-year $1000 par bonds of Vail Inc. pay 11 percent interest. The market's required…
A: A bond is a kind of debt financial instrument that is being issued by corporations and the…
Q: A bond with 12 years to maturity has an annual interest payment of $65. If the bond sells for its…
A: Given information: Par value of bond is $1,000 Annual interest payment is $65 Number of years is 12
Q: A bond has a maturity value draw of 1.125 % from present worth and is paying discrete compound…
A: As per question= 1.03^4= 1.125 times Compound Interest Rate=3% Time Before maturity=4 years…
Q: Calculate the Macaulay duration of an 8 percent, $1,000 par bond that matures in four years if the…
A: Modified duration = Duration / (1 + Ytm / n)
Q: Compute the intrinsic value of a 16 % coupor ear maturity bond whose face value (1000E) e paid at…
A: intrinsic value of bond is present value of coupon payment +Present value of par value of bond.
Q: A $85,000, 8.50% bond redeemable at par, with annual coupon payments, is purchased 8 years before…
A: The bond's value or the price can be computed as the sum of the bond's coupons and principal after…
Q: A. Compute the current price of each of the following bonds (assume $1,000 par value): a. 6 year, 6%…
A: A bond can be defined as the debt instrument that is usually issued by the company in order to raise…
Q: ll be redeemed at the conclusion of the ten-year period. If it is now being sold for P1,500,…
A: Yield to maturity refers to the concept of evaluating the rate of return on a bond after its…
Q: Construct a bond schedule showing the accumulation of discount on a 6,000 4% bond with quarterly…
A: This question is related to bond valuation. Before the construction of the bond schedule, we have to…
Q: A 10-year bond with coupons at 5% convertible quarterly is redeemed at 1500. If the bond is…
A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…
Q: A bond has a maturity value draw of 1.125 % from present worth and is paying discrete compound…
A: Present worth is the current value of cash flows that are expected to happen in the future.
Q: A 20-year maturity bond with par value of $1,000 makes semiannual coupon payments at a coupon rate…
A: Bond maturity is 20 years Par value of bond is $1000 Coupon rate of bond is 8% Bond type: Semi…
Q: A $1,000, 9.50% semiannual bond is purchasedfor $1,010. If the bond is sold after three years andsix…
A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…
Q: A newly issued 20-year maturity, zero-coupon bond is issued with a yield to maturity of 8% and face…
A: Zero coupon bond is a debt instrument which does not involve any coupon payment and is issued below…
Q: Compute the price of a 5.9 percent coupon bond with 15 years left to maturity and a market interest…
A: Bond is a debt instrument used to fund the operations of a business and act as a loan agreement…
Q: A P1,000 bond which mature in 10 years and with a bond rate of 5% payable annually is to be redeemed…
A: Bond is referred as the fixed income instrument, which used to represent the loan that are prepared…
Assume that you purchased an 8 percent, 20-year, $1,000 par, semiannual payment
priced
a. Its promised yield to maturity
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- You intend to purchase a 10-year, $1,000 face value bond that pays interest of $60 every 6 months. If your nominal annual required rate of return is 10 percent with semiannual compounding, how much should you be willing to pay for this bond? Select one: O a. $1,124.62 O b. $1,086.15 O c. $ 957.50 O d. $826.31 O e. $1,032.20Consider a 12%, 15 year bond that pays interest semiannually, and its current price is $675. What is the promise yield to maturity?A P1,000 bond which mature in 10 years and with a bond rate of 5% payable annually is to be redeemed at par at the end of this period. It is sold at P1,030. Determine the yield at this price. Manual solution
- Assume a bond that promises eight annual coupon payments of $70 and will repay its face value of $1000 at the end of the eight years. Assuming that you are offered the bond for a price of $1035.94, use detailed workings to compute the implied YTMA $1,000, 9.50% semiannual bond is purchasedfor $1,010. If the bond is sold after three years andsix interest payments, what should the selling pricebe to yield a 10% return on the investment?A P1,500 bond with a 15 percent yearly interest rate will be redeemed at the conclusion of the ten-year period. If it is now being sold for P1,500, calculate the yield at this price
- A P1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be redeemed at par at the end of this period. If it is sold now for P1,390, determine the yield at this price.Which of the following statements is true? You intend to purchase a 10-year, $1,000 face value bond that pays interest of $60 every 6 months. If your nominal annual required rate of return is 10 percent with semiannual compounding, how much should you be willing to pay for this bond? Select one:A P1,000 bond which mature in 10 years and with a bond rate of 5% payable annually is to be redeemed at par at the end of this period. It is sold at P1,030. Determine the yield at this price. With Cash flow diagram
- Assume that a bond makes 30 equal annual payments of \$1,000$1,000 starting one year from today. (This security is sometimes referred to as an amortizing bond.) If the discount rate is 3.5\%3.5% per annum, what is the current price of the bond?What is the present value of a 10-year bond that has 4 years left-to-maturity (N), 7% annual required rate (I/Y) and 8% annual payment (PMT)? (Note: assume future value, FV, is $1000).If a $ 3,000, 12% semiannual bond is purchased for $3,100 and sold 5 years later for $2,900. What was the quarterly yield on the investment?