Which of the following is closest to the investment cost of a 30 year bond at time zero- that makes annual coupon payments at a rate of 5% if the face value payment is $100 and the bond is trading at a yield of 6%? $90 $85 $100 $95
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- Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?Yield to Maturity and Yield to Call Arnot International’s bonds have a current market price of $1,200. The bonds have an 11% annual coupon payment, a $1,000 face value, and 10 years left until maturity. The bonds may be called in 5 years at 109% of face value (call price = $1,090). What is the yield to maturity? What is the yield to call if they are called in 5 years? Which yield might investors expect to earn on these bonds, and why? The bond’s indenture indicates that the call provision gives the firm the right to call them at the end of each year beginning in Year 5. In Year 5, they may be called at 109% of face value, but in each of the next 4 years the call percentage will decline by 1 percentage point. Thus, in Year 6 they may be called at 108% of face value, in Year 7 they may be called at 107% of face value, and so on. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?
- A one-year zero coupon bond costs $99.43 today. Exactly one year from today, it will pay $100. What is the annual yield-to-maturity of the bond? (1.e., what is the discount rate one needs to use to get the price of the bond given the future cash flow of $100 in one year?) 1.0057 0.0057 2.0057 -0.0057What is the price of a coupon bond with a face value of $300 and 7 years to maturity, which makes semi‐annual coupon payments at the rate of 3% p.a., if it is trading at a yield of 6%? A. $246.14 B. $249.17 C. $249.76 D. $246.73What is the price of a zero coupon bond with a $1,000 face value, 10-year maturity, and annual compounding? The market rate on similar bonds is 8%. a. $ 463.193 b. $ 655.228 c. $934.516 d. $ 1000 I
- Use the following information to answer the questions. Bond A Bond B Face Value 1000 1000 Coupon rate 10% 8% Coupons paid out Semi-annually Quarterly Years to maturity 4 4 Bond price 800 ? Suppose bond A and B have the same YTM. What is the yield to maturity of bond A? What is the price of bond B? What is the current yield of bond B? What is the EAR (effective annual rate) of these two bonds?What is the price of a zero coupon bond with $1,000 face value, 8 years to maturity and an annual yield of 3.7%? O $822.88 O $747.77 O $813.96 O $739.671. Consider a real return bond with a face value of $15,000 and a coupon yield of 5.2%. What is the coupon payment after one year if the inflation rate is 6.8%? Select one: a) $817.44 b) $833.04 c) $825.24 d) $809.64 I
- What is the price of a bond with a par value of $1,000, an 8% coupon rate paid annually, and a yield to maturity of 6% if the bond matures in 10 years? $1,124.20 $1,136.03 $1,147.20 $1,157.74 $1,167.68 Please Only typing answerWhat is the bond market price with a face value of $1,000 at yield to maturity of 9% for 10 years with a coupon rate of 8%? 0 $835.82 o $935.82 o $422.40 o $513.42 O none AConsider a bond that pays annually an 8% coupon with 20 years to maturity. The percentage change in the price of the bond if its yield to maturity increases from 5% to 7% is closest to? Set your decimal places to 4 in your financial calculator. a 19.50% b 24.22% c -24.22% d -19.50%
