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Weight of each bond and Bond's portfolio duration are as follows:
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b. A bond portfolio consists of the following three annual coupon payment bonds. Prices are per...
a. An investor buys a 5 % annual coupon payment bond with three years to maturity....
a. An investor buys a 5 % annual coupon payment bond with three years to maturity. The bond has a yield-to-maturity of 9%. The par value is $1000. i. Determine the market price of the bond. (2 marks) ii. Calculate the bond's duration. (3 marks) b.A bond portfolio consists of the following three annual coupon payment bonds. Prices are per 100 of par value. Modified Duration Yield-to- Coupon (%) Bond Maturity Market (years) Price Maturity (%) (years) 5.23 7.98 Value...
Question 2 Homework. Unanswered A semi-annual coupon bond has MacD of 25.3 years, yield-to-maturity of 5.3%,...
Question 2 Homework. Unanswered A semi-annual coupon bond has MacD of 25.3 years, yield-to-maturity of 5.3%, and price of $1135.71. What is its DV01? Answer in dollars, rounded to three decimal places. Numeric Answer: Unanswered 3 attempts left Submit Question 3 Homework Unanswered You own a bond portfolio worth $51,000. You estimate that your portfolio has an average YTM of 5.9% and a Modified Duration of 14 years. If your portfolio's average YTM were to decrease by 4 basis points,...
1. An investor purchases an annual coupon bond with a 6% coupon rate and exactly 20...
1. An investor purchases an annual coupon bond with a 6% coupon rate and exactly 20 years remaining until maturity at a price equal to par value. The investor’s investment horizon is eight years. The approximate modified duration of the bond is 11.470 years. What is the duration gap at the time of purchase? (Hint: use approximate Macaulay duration to calculate the duration gap) 2. An investor plans to retire in 10 years. As part of the retirement portfolio, the...
You've created a small bond portfolio by investing excess corporate cash in two annual-coupon bonds. The...
You've created a small bond portfolio by investing excess corporate cash in two annual-coupon bonds. The YTM for both bonds is 7.5% Bond Q is a 5-year, 4.5% coupon with a $1,000 face value; current price of $878.62 Bond R is a 6-year, 9.5% coupon with a $1,000 face value; current price of $1,093.88 What is the portfolio duration, that is, the duration of both instruments considered together, using the prices of the bonds. (Hint: This is not just the...
pls help 4. Consider a bond of face value $1,000 with an annual coupon of 8.0%...
pls help
4. Consider a bond of face value $1,000 with an annual coupon of 8.0% and 10 years to maturity and a present price of $877.11. Assume the yield curve is flat at 10%. a. Calculate the duration and convexity for this bond. b. Suppose your portfolio consists of this bond only and you want to immunize your interest risks. And suppose you can only buy or sell 1 zero-coupon bond. What should be the maturity of this zero-coupon...
• What are the prices of the following two bonds (with annual coupon payments)? Bond B...
• What are the prices of the following two bonds (with annual coupon payments)? Bond B Maturity (T) Coupon Rate (C) Discount Rate (r) Par Value (FV) Bond A 4 Years 5% 8% $1,000 30 Years 5% 8% $1,000
You are considering the following bonds to include in your portfolio: Bond 1 Bond 2 Bond...
You are considering the following bonds to include in your portfolio: Bond 1 Bond 2 Bond 3 Price $900.00 $1,100.00 $1,000.00 Face Value $1,000.00 $1,000.00 $1,000.00 Coupon Rate 7.00% 10.00% 9.00% Frequency 1 2 4 Maturity (Years) 15 20 30 Required Return 9.00% 8.00% 9.00% Determine the highest price you would be willing to pay for each of these bonds using the PV function. Also find whether the bond is undervalued, overvalued, or fairly valued. Determine the yield to maturity...
The next three questions refer to the following data. Assume all bonds make semi-annual coupon payments...
The next three questions refer to the following data. Assume all bonds make semi-annual coupon payments and have face values of $1,000. Time to maturity Coupon rate Price 3.00% 3.50% 3.25% 4.00% 3.50% $978.36 $975.49 $970.74 $1,003.67 $995.46 The modified duration of the 4-year bond is approximately (a) 3.736 (b) 3.775 (c) 3.595 (d) 3.632
Bond prices. Price the bonds from the following table with annual coupon payments: a. Find the...
Bond prices. Price the bonds from the following table with annual coupon payments: a. Find the price for the bond in the following table: (Round to the nearest cent.) Yield to Maturity Years to Maturity 25 Par Value $5,000.00 Price Coupon Rate 11% - i Data Table (Click on the following loon in order to copy its contents into a spreadsheet.) Coupon Rate Years to Maturity 25 Price 11% Par Value $5.000.00 $5,000.00 $1,000.00 $1,000.00 Yield to Maturity 9% 8%...
Bond prices. Price the bonds from the following table with annual Coupon payments: Find the price...
Bond prices. Price the bonds from the following table with annual Coupon payments: Find the price for the bond in the following table (Round to the nearest cent) Yield to Maturity Years to Maturity 15 Par Value $5,000.00 Price Coupon Rate 10% Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Years to Maturity Yield to Maturity Price Coupon Rate 10% Par Value $5,000.00 $1,000.00 $1,000.00 $1,000.00 12% 7% 15 20 Print Done
a. An investor buys a 5 % annual coupon payment bond with three years to maturity. The bond has a yield-to-maturity of 9%. The par value is $1000. i. Determine the market price of the bond. (2 marks) ii. Calculate the bond's duration. (3 marks) b.A bond portfolio consists of the following three annual coupon payment bonds. Prices are per 100 of par value. Modified Duration Yield-to- Coupon (%) Bond Maturity Market (years) Price Maturity (%) (years) 5.23 7.98 Value...
Question 2 Homework. Unanswered A semi-annual coupon bond has MacD of 25.3 years, yield-to-maturity of 5.3%, and price of $1135.71. What is its DV01? Answer in dollars, rounded to three decimal places. Numeric Answer: Unanswered 3 attempts left Submit Question 3 Homework Unanswered You own a bond portfolio worth $51,000. You estimate that your portfolio has an average YTM of 5.9% and a Modified Duration of 14 years. If your portfolio's average YTM were to decrease by 4 basis points,...
You've created a small bond portfolio by investing excess corporate cash in two annual-coupon bonds. The YTM for both bonds is 7.5% Bond Q is a 5-year, 4.5% coupon with a $1,000 face value; current price of $878.62 Bond R is a 6-year, 9.5% coupon with a $1,000 face value; current price of $1,093.88 What is the portfolio duration, that is, the duration of both instruments considered together, using the prices of the bonds. (Hint: This is not just the...
pls help
4. Consider a bond of face value $1,000 with an annual coupon of 8.0% and 10 years to maturity and a present price of $877.11. Assume the yield curve is flat at 10%. a. Calculate the duration and convexity for this bond. b. Suppose your portfolio consists of this bond only and you want to immunize your interest risks. And suppose you can only buy or sell 1 zero-coupon bond. What should be the maturity of this zero-coupon...
• What are the prices of the following two bonds (with annual coupon payments)? Bond B Maturity (T) Coupon Rate (C) Discount Rate (r) Par Value (FV) Bond A 4 Years 5% 8% $1,000 30 Years 5% 8% $1,000
The next three questions refer to the following data. Assume all bonds make semi-annual coupon payments and have face values of $1,000. Time to maturity Coupon rate Price 3.00% 3.50% 3.25% 4.00% 3.50% $978.36 $975.49 $970.74 $1,003.67 $995.46 The modified duration of the 4-year bond is approximately (a) 3.736 (b) 3.775 (c) 3.595 (d) 3.632
Bond prices. Price the bonds from the following table with annual coupon payments: a. Find the price for the bond in the following table: (Round to the nearest cent.) Yield to Maturity Years to Maturity 25 Par Value $5,000.00 Price Coupon Rate 11% - i Data Table (Click on the following loon in order to copy its contents into a spreadsheet.) Coupon Rate Years to Maturity 25 Price 11% Par Value $5.000.00 $5,000.00 $1,000.00 $1,000.00 Yield to Maturity 9% 8%...
Bond prices. Price the bonds from the following table with annual Coupon payments: Find the price for the bond in the following table (Round to the nearest cent) Yield to Maturity Years to Maturity 15 Par Value $5,000.00 Price Coupon Rate 10% Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Years to Maturity Yield to Maturity Price Coupon Rate 10% Par Value $5,000.00 $1,000.00 $1,000.00 $1,000.00 12% 7% 15 20 Print Done
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