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It is now January 1, 2022, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 5.25% annual coupon and had a 30-year original maturity. There is 5 years of call protection, after which time it can be called at 105.25 - that is, at 105.25% of par, or $1,052.50. Interest rates have declined since it was issued, and it is now selling at 102.5% of par, or $1,025.00.
What is the Yield to Call (YTC)?
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- It is now January 1, 2022, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 5.25% annual coupon and had a 30-year original maturity. There is 5 years of call protection, after which time it can be called at 105.25 - that is, at 105.25% of par, or $1,052.50. Interest rates have declined since it was issued, and it is now selling at 102.5% of par, or $1,025.00. What is the Yield to Maturity (YTM)? What is the Yield to Call (YTC)?It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issuedon January 1, 2016. It has an 8% semi-annual coupon and had a 30-year original maturity. (It matureson December 31, 2045.) There is 5 years of call protection (until December 31, 2020), after which timeit can be called at 108—that is, at 108% of par. Interest rates have declined since it was issued, and it isnow selling at 119.12% of par. A. What is the yield to maturity? What is the yield to call? B. If you boughtthis bond, which return would you actually earn? Explain your reasoning. C. Suppose the bond had beenselling at a discount rather than a premium. Would the yield to maturity have been the most likelyreturn, or would the yield to call have been most likely? If the answer of yield to maturity is increasedby 7% then what will be the present value of bond?It is now January 1, 2013, and you are considering the purchase of an outstanding bond that was issued on January 1, 2010. It has a 7 percent annual coupon and had a 30-year original maturity. (It matures on December 31, 2039.) There were 11 years of call protection (until December 31, 2020), after which time it can be called at 107.5 percent of par, or $1,075. Interest rates have fallen since the bond was issued, and it is now selling at 114.5 percent of par, or $1,145. If you bought this bond, what rate of return would you probably earn, assuming you hold the bonds until they either mature or are called? a. 5.91% b. 7.00% c. 5.48% d. 6.02% e. 4.78%
- It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has a 9.5% annual coupon and had a 30-year original maturity. (It matures on December 31, 2048) There is 5 years of call protection ( until December 31, after which time it can be called at 108 - that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 116.57% of par, or $1,165.70. a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % b. If you bought this bond, which return would you actually earn? I. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. II. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC. III. Investors…It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has a 9% annual coupon and had a 20-year original maturity. (It matures on December 31, 2035.) There is 5 years of call protection (until December 31, 2020), after which time it can be called at 109-that is, at 109% of par, or $1,090. Interest rates have declined since it was issued, and it is now selling at 114.12% of par, or $1,141.20. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. %What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. %It is now January 1, 2019, and you are considering the purchase of an outstanding bond that was issued on January 1, 2017. It has a 9.5% annual coupon and had a 20-year original maturity. (It matures on December 31, 2036.) There is 5 years of call protection (until December 31, 2021), after which time it can be called at 108—that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 120.08% of par, or $1,200.80. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % If you bought this bond, which return would you actually earn? Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. Investors would not…
- It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has an 8.5% annual coupon and had a 15-year original maturity. (It matures on December 31, 2033.) There is 5 years of call protection (until December 31, 2023), after which time it can be called at 108-that is, at 108 % of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 111.55% of par, or $1,115.50. a. What is the yield to maturity? Do not round Intermediate calculations. Round your answer to two decimal places. What is the yield to call? Do not round Intermediate calculations. Round your answer to two decimal places. % b. If you bought this bond, which return would you actually earn? I. Investors would expect the bonds to be called and earn the YTC because the YTC is less than the YTM. II. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM. III. Investors would not…It is now January 1, 2019, and you are considering the purchase of an outstanding bond that was issued on January 1, 2017. It has an 8.5% annual coupon and had a 15-year original maturity. (It matures on December 31, 2031.) There is 5 years of call protection (until December 31, 2021), after which time it can be called at 108—that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 111.55% of par, or $1,115.50. a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. b. What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places.It is now January 1, 2021, and you are considering the purchase of an outstanding bond that was issued on January 1, 2019. It has an 8.5% annual coupon and had a 30-year original maturity. (It matures on December 31, 2048.) There is 5 years of call protection (until December 31, 2023), after which time it can be called at 108-that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 116.57% of par, or $1,165.70. a. What is the yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % b. If you bought this bond, which return would you actually earn? I. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC. II. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM. III. Investors…
- The maturity date of a bond with $1000 face value and 12% annual coupon rate (paid semi-annually) is 01/01/2024. What is the accrued interest on 04/01/2021? The last expert who answered this claimed the last coupon date was October 1, 2020 which I believe is wrong. Shouldnt the coupon payments be every 6 months prior to the maturity date of 04/01/2024 since that would be the last coupon payment?It is now January 1, 2018, and you are considering the purchase of anoutstanding bond that was issued on January 1, 2016. It has an 8% annual coupon and hada 30-year original maturity. (It matures on December 31, 2045.) There is 5 years of call protection(until December 31, 2020), after which time it can be called at 108—that is, at 108%of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at119.12% of par, or $1,191.20.a. What is the yield to maturity? What is the yield to call?b. If you bought this bond, which return would you actually earn? Explain your reasoning.c. Suppose the bond had been selling at a discount rather than a premium. Would theyield to maturity have been the most likely return, or would the yield to call havebeen most likely?Two years ago (i.e., in November 2018), you purchased a newly-issued 30-year Treasury bond with a coupon rate of 3.25% (APR with semi-annual compounding). The face value of the bond is $10,000 and you purchased it at the face value. The bond pays semi-annual coupons each November and each May. The coupon payment for November 2020 has just been made and you expect to obtain the next coupon payment exactly six months from today in May 2021. The bond matures after exactly 28 years in November 2048. The current yield to maturity (i.e., in November 2020) on this bond is 1.60% (APR with semi-annual compounding) due to the recent rate declines by the Federal Reserve and due to the slowdown of the economy. What is the current price of this bond?