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- Calculate the selling price of the following 5-year bond issue: e. # bonds Bond rate of interest Interest payable Market rate of interest Bond maturity (face) value 600 5.8% semi-annually 6.0% $1,000Bonds with an 8% stated interest rate were issued when the market rate of interest was 5%.This bond was issued ata. face value.b. par value.c. a premium.d. a discount.interest on 3 year bond is 8% and on a 4 year bond is 9%. The forward rate in year 4 is
- The interest rate on one-year Treasury bonds is 0.8 percent, the rate on two-year T-bonds is 0.9 percent, and the rate on three-year T-bonds is 1.0 percent. Using the expectations theory, compute the expected one-year interest rate in the second year (Year 2 only). Round your answer to one decimal place. % Using the expectations theory, compute the expected one-year interest rate in the third year (Year 3 only). Round your answer to one decimal place. %If bonds are issued at 101.25, this means thata. a $1,000 bond sold for $1,012.50.b. a $1,000 band sold for $101.25.c. the bonds sold at a discount.d. The bond rate of interest is 10.125% of the market rate of interest.An 8%, P1,000 bond issued to yield 10% has 6 years remaining in its term. The bond pays interest annually; the next interest payment is due on year from today. What is the issuer’s carrying amount of the bond using the interest method of amortizing bond discount and premium? A. 913 B. 633 C. 667 D. 819
- Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): The timeline starts at Period 0 and ends at Period 20. The timeline shows a cash flow of $ 20.72 each from Period 1 to Period 19. In Period 20, the cash flow is $ 20.72 plus $ 1,000. Period0121920 Cash Flows$20.72$20.72$20.72$20.72+$1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value?Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 percent, the future value of the bond (the amount the bond pays in one year) is? a. P1,560.00 b. P1,540.00 c. P1,440.00 d. 1,442.31What is the present value of the principal amount (face value) based on the following example. 10% five-year bond, par 100, with an 11% discount rate. A $4.74 B $58.54 C) $94.79 D $61.76
- 3. If bonds are issued at 101.25, this means that a.a $1,000 bond sold for $1,012.50. b.the bonds sold at a discount. c.the bond rate of interest is 10.125% of the market rate of interest. d.a $1,000 bond sold for $101.25.4. Assume that as of today, the annualized interest rate for a twelve-year bond is 8percent. Today’s annualized interest rate for a five-year bond is 6 percent. Theannualized interest rate for a four-year bond expected in five years is 5 percent. Useonly this information to estimate the annualized interest rate for a three-year bondexpected in nine years. The interest rate for a twelve-year bond has a .10% liquiditypremium. Use the geometric average method. Make sure to show your work.A bond promises to pay $5,350 next year. The interest rate on this bond is 7%. The price of this bond today must be: a. $5,000 b. $5,100 c. $5,200 d. $5,240