ZuoTi.Pro
Question

Show calculations, and write clearly. Please submit via Blackboard. l. (15 points) i 0- year Treasury bonds have a coupon rate of 2.2 % and par value of S1000. The selling price is $ 970. IA. Calculate and explain how much in dollars you will receive in cash on an annual basis. IB. Calculate total dollar income during the 10 years of investing and holding of this bond. 1C. Calculate your final wealth in dollars. 2. (10 points) 10-year Treasury bonds have a coupon rate of 2.2 % and par value of $1000, and yield to maturity of 3% 2A. What is the annual return on this bond as a percentage. 2B. Explain the yield to maturity.
3 Please show full calculations in the table. 15 La Calculate the price and duration for the following bond when the going rate of interest is 3%. The bond offers 2.75% 1.a. points coupon rate, matures in 3 years and has a par value of $1,000. Show full calculations in the table below. | YR | PV of $ 1 at 3% Year Present Value of Cash Flow Bond PV (Cash Flows) Cash Flows Total Price- Duration
4. (5 points) If the bond duration is 2.5 and the market rate of interest (the discount rate) rises by 1 percentage point, what would be the percentage change in price? SA. (5 points) You expect both the short term and long term rates of interest to rise. Explain which of the following two bonds will you buy? Bond ZWQ with a duration of 3 or ZQW with a duration of 307 5B. (10 points) Explain what is meant by the yield curve. Show your drawing of the yield curve that is prevailing now in 2019. Assume an inflation protection bond sold for $900. 40 points 6. TIPS) with 30 years remaining to expiration carries a coupon rate of 2.75% and is The par value of the bond is $1,000. Complete the table below and show all calculations in each cell. Accrued Principal value due to inflation ROR Interest Received ROR Inflation | 2.0%
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Data Given: # of years to maturity Annual coupon rate Par value of the bond Bonds selling price 10 2.2% $1,000 $970 Requirem

1 0
Add a comment
Know the answer?
Add Answer to:
Show calculations, and write clearly. Please submit via Blackboard. l. (15 points) i 0- year Treasury...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 3.Please show full calculations in the table. 15 points coupon rate, matures in 3 years and...

    3.Please show full calculations in the table. 15 points coupon rate, matures in 3 years and has a par value of $1,000. Show full calculations in the table below. 1.a. Calculate the price and duration for the following bond when the going rate of interest is 3%. The bond offers 2.75% Bond PV (Cash Flows) Year Present Value of Cash Flow Cash Flows YR | PV of $ 1 at 390 Total Price = Duration

  • Explain what is meant by the yield curve. Show your drawing of the yield curve that...

    Explain what is meant by the yield curve. Show your drawing of the yield curve that is prevailing now in 2019. 40 points Assume an inflation protection bond (TIPS) with 30 years remaining to expiration carries a coupon rate of 2.75% and is sold for $900. The par value of the bond is $1,000. Complete the table below and show all calculations in each cell. YR Inflation Interest Received Accrued Principal value Interest earned due to inflation Total return ROR...

  • 1.a. Calculate the price and duration for the following bond when the going rate of interest...

    1.a. Calculate the price and duration for the following bond when the going rate of interest is 3%. The bond offers 2.75% coupon rate, matures in 3 years and has a par value of $1,000. Show full calculations in the table below. YR PV of $ 1 at 3% Bond Cash Flows PV (Cash Flows) Year * Present Value of Cash Flow 1 2 3 3 Total Price =                                                                                                     Duration                     

  • 40 points Assume an inflation protection bond (TIPS) with 30 years remaining to expiration carries a...

    40 points Assume an inflation protection bond (TIPS) with 30 years remaining to expiration carries a coupon rate of 2.75% and is sold for $900. The par value of the bond is $1,000. Complete the table below and show all calculations in each cell. YR Inflation Interest Received Accrued Principal value Interest earned due to inflation Total return ROR (Nominal) Real ROR 1 2.0% 2 1% 3 0 %

  • Questions 1-4 show excel formulas The coupon rate and market price for the 10-year US Treasury...

    Questions 1-4 show excel formulas The coupon rate and market price for the 10-year US Treasury bond are 2.50% and 96.3828 respectively. Note, the price is expressed as a percentage of par (like other bonds). If par is $1000, then this bond is selling for $963.828. 1. Assume that this bond will mature in precisely 10 years, pay coupons semi-annually, and has a par value of $1000. Determine the yield to maturity for this bond. 2. Compute the duration of...

  • 2. 10-year Treasury bonds have a coupon rate of 2.2 % and par value of $1000,...

    2. 10-year Treasury bonds have a coupon rate of 2.2 % and par value of $1000, and yield to maturity of 3%. 2A. What is the annual return on this bond as a percentage. 2B. Explain the yield to maturity.

  • Determine the price of the following bonds. Please show your work. a. Duration: 2 years Coupon...

    Determine the price of the following bonds. Please show your work. a. Duration: 2 years Coupon Rate: 3% Face Value: $500 Discount Rate: 3.25% whats the Price: _______________ . This bond is selling at a : PREMIUM or DISCOUNT b. Duration: 3 years Coupon Rate: 3% Face Value: $500 Discount Rate: 2.75% whats the Price: __________________ ? c This bond is selling at a : PREMIUM or DISCOUNT (pick one) d. A $1,000, 10-year Treasury bond with a yearly coupon...

  • Assume an inflation protection bond (TIPS) with 30 years remaining to expiration carries a coupon rate...

    Assume an inflation protection bond (TIPS) with 30 years remaining to expiration carries a coupon rate of 2.75% and is sold for $900. The par value of the bond is $1,000. Complete the table below and show all calculations in each cell. YR Inflation Interest Received Accrued Principal value Interest earned due to inflation Total return ROR (Nominal) Real ROR 1 2.0% 2 1% 3 0 %

  • Show Work Please 4. (35 points) A bond with a yield to maturity of 3% and...

    Show Work Please 4. (35 points) A bond with a yield to maturity of 3% and a coupon rate of 3% has 3 years re- maining until maturity. Calculate the duration and the modified duration for this bond assuming annual interest payments and a par value of $1,000. Why is the duration of this bond higher than the 3-year 10% coupon bond yielding 10% we looked at in class that had a duration of 2.7 years? If the required market...

  • 2) Assume that you have a 10 year Treasury Bond with a yield of 2.76%, coupon...

    2) Assume that you have a 10 year Treasury Bond with a yield of 2.76%, coupon rate of 2.35%,   paying annual coupon payments. Assume the face value of the bond is $1,000. Shock the yield on the bond by 100 basis points up and down to determine the approximate duration and approximate convexity of the bond. Determine the approximate percentage change in the price of the bond because of the effects of duration and convexity when there is a 100...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT