QUESTION 7 As a recenty hired analyst, you are tasked with evaluating your firm's bond portfolo. The first bond you evaluate has a constant payment of $427 per year and the prospectus claims the present value of the bond is $5.006. What is the interest rate of the bond in question? Submit your answer in percent to the first decimal place, that is, 2.57% 26 or 2.6%
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- A zero-coupon bond is a bond that is sold for less than its face value (that is, it is discounted) and has no periodic interest payments. Instead, the bond is redeemed for its face value at maturity. Thus, in this sense, interest is paid at maturity. Suppose that a zero-coupon bond sells for $8,800 and can be redeemed in 20-years for its face value of $48,000. What is the annual compound rate of return? Annual compound rate = % (Round to two decimal places as needed.)Question #8: Current Yield [9 Points] A $1000 face-value coupon bond has a current yield of 5.75% and a market price of $1060. What is the bond's coupon rate?A four-year bond has an 6 percent coupon rate and a face value of $1,000 . If the bond's current price is $817.75 , calculate the yield to maturity of the bond (assuming annual interest payments). A) 8 percent B) 10 percent C) 12 percent D) 6 percent
- Economics In 54 months time you expect a cash flow of $3 million. Calculate it’s present value (PV) given the 54-month interest rate is currently 4%, with a volatility of 120 basis points (bps). Explain, using equations with properly-defined mathematical notation, how to map this cash flow to vertices at 4 years and 5 years, in such a way that the volatility of the present value of the mapped cash flow remains at 120 bps. Suppose the 4-year rate has a volatility of 110 bps and the 5-year rate has a volatility of 150 bps, and their correlation is 0.9. How much should be mapped to each vertex. Give your answer in PV terms and round your answers to whole $ values.How would I figure this out. The equation I’ve been using for bonds is Y=ai/p Ai for annual interest P for price of bond. Question: One year before maturity the price of a bond with a principal amount of $1000 and a coupon rate of 5% paid annually fell to $981. The one-year interest rate must be: A) 7.0% B) 1.9% C) 5.0% D) 8.5% McGrawHill says that 7% is the correct answer but I don’t know how to do the math to get that. If a bank offers an investment opportunity for which the interest is compounded quarterly, and you will earn an annual effective interest rate of 19.25%. Determine the nominal interest rate. Note: when calculating interest rates, do not convert to a percent. Leave it in decimal format and round to 4 places after the decimal. So if you think the answer is 3.45678%, then leave it as a proportion as 0.0345678 and then round to 0.0346.
- What is the present value of having $22,000 in 6 years, when the interest rate is 4% ? Place your answer with two decimal 2 places in cell B3.3 Present Value = 4 If the interest rate changed to 6%, would the present value 5 increase or decrease? Why? Answer and explain why in cell A 6. 6 If the time frame was changed from 6 years to 5 years, would the present value of having $22,000 in the future increase or 8 decrease? Why? Answer and explain why in cell A8.6) You purchased an annual interest coupon bond one year ago that had nine years remaining to maturity at that time. The coupon interest rate was 10%, and the par value was $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the yield to maturity continued to be 8%, your annual total rate of return on holding the bond for that year would have been A) 8.00%. B) 7.82%. C) 7.00%. D) 11.95%. E) None of the options are correct. Provide an accurate answer with justification.A stock had returns of 14 percent, 17 percent, 14 percent, 20 percent, 16 percent, and 2 percent over the last six years. What is the arithmetic return for the stock? Arithmetic return What is the geometric return for the stock? Geometric return