Using the formula given below: Rbonds = (F − P)/P, if the market price of a $1,000-face-value discount bond changes from $925 to $900, the yield to maturity increases by (enter your response here)%. (Round your response to two decimal places.)
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- Question 17 The yield to maturity of a one-year, risk-free, zero-coupon bond with a $10,000 face value and a price of $8,063 when released is %. (round your answer to two decimal places)A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places. What is the yield to maturity if the bond is selling for $900? What is the yield to maturity if the bond is selling for $1,000? What is the yield to maturity if the bond is selling for $1,100?Calculate the present value of a $1,300 discount bondwith seven years to maturity if the yield to maturity is 8%.
- You own a bond with a coupon rate of 6.3 percent and a yield to call of 7.2 percent. The bond currently sells for $1,105. If the bond is callable in five years, what is the call premium of the bond? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Call premiumAssume that a bond has a face value of $250,000. It has a maturity of 1 year and the coupon rate of interest is 5%. If the current market price of this bond is $225,000, what is the yield to maturity? If the market price of the bond increases to $240,000, what happens to the yield to maturity?Consider a coupon bond that has a par value of $1,000 and a coupon rate of 8%. The bond is currently selling for $1,055.78 and has 2 years to maturity. What is the bond's yield to maturity (YTM)? The yield to maturity is %. (Round your response to one decimal place.)
- 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.Calculate the present value of a $1,300 discount bond with 6 years to maturity if the yield to maturity is 5%. The present value is $ (Round your response to two decimal places.)Rework part (f), assuming that Annie holds the bond for 10 years and sells it when the required return is 7.0%. Compare your finding to that in part (f), and comment on the bond's maturity risk. PV= 1,000 N=10 I/Y= 7% Assume that Annie buys the bond at its current price of $983.80 and holds it until maturity. What will her current yield and yield to maturity (YTM) be, assuming annual interest? After evaluating all of the issues raised above, what recommendation would you give Annie with regard to her proposed investment in the Atilier Industries bonds?
- 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.)How much would you pay for a perpetual bond that pays an annual coupon of $200 per year and yields on competing instruments are 20%? You would pay $ (Round your response to the nearest penny.) If competing yields are expected to change to 12%, what is the current yield on this same bond assuming that you paid $1,000? The current yield is |%. (Round your response to the nearest integer.) If you sell this bond in exactly one year, having paid $1,000, and received exactly one coupon payment, what is your total return if competing yields are 12%? Your total return is %. (Round your response to two decimal places.)A bond with a face value of $1,000 has 8 years until maturity, has a coupon rate of 8%, and sells for $1,100. What is the yield to maturity if interest is paid once a year? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places. What is the yield to maturity if interest is paid semiannually? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.
