4) A 20 year, 4%, $1000 face value bond paying annual coupons is callable at par at the end of any year from 15 on.
a) How much should an investor pay if they want to earn at least 6% until the bond is called (or matures).
b) How much should an investor pay if they want to earn at least 3% until the bond is called (or matures).
1.
=MIN((4%*1000/6%*(1-1/1.06^15)+1000/1.06^15),(4%*1000/6%*(1-1/1.06^20)+1000/1.06^20))=770.601575628695
2.
=MIN((4%*1000/3%*(1-1/1.03^15)+1000/1.03^15),(4%*1000/3%*(1-1/1.03^20)+1000/1.03^20))=1119.37935086776
4) A 20 year, 4%, $1000 face value bond paying annual coupons is callable at par...
A 20 year, 4%, $1000 face value bond paying annual coupons is callable at par at the end of any year from 15 on. a) How much should an investor pay if they want to earn at least 6% until the bond is called (or matures). b) How much should an investor pay if they want to earn at least 3% until the bond is called (or matures). explain fully please
A 20 year, 4%, $1000 face value bond paying annual coupons is callable at par at the end of any year from 15 on. a) How much should an investor pay if they want to earn at least 6% until the bond is called (or matures). b) How much should an investor pay if they want to earn at least 3% until the bond is called (or matures). explain fully please
A 1000 par-value 15-year bond has semiannual coupons of 60 each. This bond is callable at any of the last 10 coupon dates. Find the price an investor should pay to guarantee a nominal yield rate (compounded semi-annually) of (a) 14%; (b) 10%; (c) 12%.
You purchase AA rated 25-year bond with a $1000 face value, paying coupons at 2.00%, callable after 8 year for $1150 and putable after 8 years for 800. Assuming the market rates are at 1.50% when you buy the bonds what price would you pay? 8 Years later the market rates shift to 0.75%, what would the bond be sold at?
4. A 20-year maturity $1,000 par value 9% coupon bond paying coupons annually is callable in five years at a call price of $1,050. The bond currently sells at a yield to maturity of 8%. What is the yield to call? .01
QUESTION 8 (16 marks) (a) [5 marks] John purchases a $1000 face value 10-year bond with coupons of 8% per annum paid half-yearly. The bond will be redeemed at C. The purchase price is $800 and the exact present value of the redemption amount C is $301.5116. Calculate the redemption amount C, and state if the bond is redeemed at par, discount or premium. (Hint: a at 3% is 14.87747 ag at 4% is 13.59033, a at 5 % is...
3) A 10 year zero coupon bond maturing at $1000 is callable at the 7 year point for $900. a) What price should an investor pay if they want a (annual effective) yield of at least 5%? b) What will their yield be if the bond is called early?
3) A 10 year zero coupon bond maturing at $1000 is callable at the 7 year point for $900. a) What price should an investor pay if they want a (annual effective) yield of at least 5%? b) What will their yield be if the bond is called early?
A $1,000 par value 8% bond with quarterly coupons is callable five years after issue. The bond matures for 1000 at the end of ten years and is sold to yield a nominal rate of 6 percent compounded quarterly, calculated under the assumption that the bond will not be called, and is redeemed at maturity. Please determine the call premium at the end of five years, that would yield the purchaser the same nominal rate of 6% compounded quarterly if...
A 10 year zero coupon bond maturing at $1000 is callable at the 7 year point for $900. a) What price should an investor pay if they want a (annual effective) yield of at least 5%? b) What will their yield be if the bond is called early? full formulas and explanation will give thumbs up I think in general early, sorry not sure but can u just do what u think thnx