Homework Answers
YTM using approximate formula = {Coupon Amount + (Maturity Amount - Current Value)/Time period}/average price
= (130 + 12.355)/913.515
= 15.583%
b.When the coupon rate is equal to the yield to maturity, the bond trades at par i.e. par value of bond is equal to the market value of bond
When the coupon rate is less than the yield to maturity, the bond trades at discount i.e. market value of bond is lower than the par value of bond
When the coupon rate is more than the yield to maturity, the bond trades at premium i.e. market value of bond is higher than the par value of bond
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a. Calculale the yield to matunity (YTM) on this bond b. Explain the rolabionship that exisls...
A $10,000 8 percent coupon bond that sells for $10,000 has a yield to maturity of...
A $10,000 8 percent coupon bond that sells for $10,000 has a yield to maturity of 14 percent. 12 percent. 10 percent. 8 percent. 4.2 The Distinction Between Interest Rates and Returns 4 of 5 (0 complete) End-of-Chapter Exercise 19 Calculate the yield to maturity (YTM) for a one-year coupon bond with a purchase price of $800, a face value of $1,000, and a cumrent yield of 5%. The yield to maturity is (Round your response to one decimal place.)...
1. What is the yield to maturity on this bond? 2. Should you purchase the bond...
1. What is the yield to maturity on this bond?
2. Should you purchase the bond if the yield to maturity on a
comparable-risk bond is 12 percent?
(Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 14 years until maturity. You can purchase the bond for S895. a. What is the yleld to maturity con this bond? b. Should you purchase the bond if the yield to maturity on...
Please give YTM for both P6-23 (similar to) Question Help Treasury notes and bonds. Use the...
Please give YTM for both
P6-23 (similar to) Question Help Treasury notes and bonds. Use the information in the following table: Assume a $100,000 par value. What is the yield to maturity of the August 2000 Treasury note with semiannual payment? What is the yield to maturity of the February 2003 Treasury bond with semiannual payment? What is the yield to maturity of the August 2000 Treasury note? % (Round to three decimal places.) i Data Table (Click on the...
P10.8 (similar to) Which of the following bonds offers the highest current yield? a. A(n) 12.36%,...
P10.8 (similar to) Which of the following bonds offers the highest current yield? a. A(n) 12.36%, 20-year bond quoted at 96.151. b. A(n) 20.60%, 15-year bond quoted at 160.252. c. A(n) 6.18%, 18-year bond quoted at 48.076. The current yield of the bond in part a is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. Clear All 2 parts
The YTM on a bond is the interest rate you earn on your investment if interest...
The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy an annual coupon bond with a coupon rate of 8.1 percent for $905. The bond has 8 years to maturity and a par value of $1,000. What rate of return do you expect to earn...
The YTM on a bond is the interest rate you earn on your investment if interest...
The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy an annual coupon bond with a coupon rate of 8.4 percent for $920. The bond has 9 years to maturity and a par value of $1,000. What rate of return do you expect to earn...
A(n) 9.2% bond matures in 5 years and has a current yield (not YTM) of 5.5%....
A(n) 9.2% bond matures in 5 years and has a current yield (not YTM) of 5.5%. The bond's current trading price is $ Do not round any intermediate work. Round your final answer to 2 decimal places (example: 1234.567 1234.57). Do not enter the $ sign. Margin of error for correct responses/lt/.05. NOTE: You should refer to the definition of "current yield" from your class notes. The definition in your textbook should be ignored, as it might cause confusion.
P10.10 (similar to) Question Help Caleb buys a(n) 10.95 % corporate bond with a current yield...
P10.10 (similar to) Question Help Caleb buys a(n) 10.95 % corporate bond with a current yield of 5.11%. When he sells the bond 1 year later, the current yield on the bond is 7.02 %. How much did Caleb make on this investment? ila The amount Caleb made on this investment is $ (Round to the nearest cent. nne- Srk b exte icure- Enter your answer in the answer box and then click Check Answer arn me Check Answr Clear...
1. What is the bond's yield to maturity? 2. What happens to the bond's yield to...
1. What is the bond's yield to maturity?
2. What happens to the bond's yield to maturity if the bond
matures in 20 years?
3. What if it matures in 5 years?
(Yield to maturity) A bond's market price is $1,200. It has a $1,000 par value, will mature in 10 years, and has a coupon interest rate of 11 percent annual interest, but makes its interest payments semiannually. What is the bonds yield to maturity? What happens to the...
I JIMUI LUJ (Related to Checkpoint 9.2) (Yield to maturity) The market price is $850 for...
I JIMUI LUJ (Related to Checkpoint 9.2) (Yield to maturity) The market price is $850 for a 13-year bond ($1.000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield to maturity? The bond's yield to maturity is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. All narts showina javascriot:doExercise(4): Clear All Check Answer
A $10,000 8 percent coupon bond that sells for $10,000 has a yield to maturity of 14 percent. 12 percent. 10 percent. 8 percent. 4.2 The Distinction Between Interest Rates and Returns 4 of 5 (0 complete) End-of-Chapter Exercise 19 Calculate the yield to maturity (YTM) for a one-year coupon bond with a purchase price of $800, a face value of $1,000, and a cumrent yield of 5%. The yield to maturity is (Round your response to one decimal place.)...
1. What is the yield to maturity on this bond?
2. Should you purchase the bond if the yield to maturity on a
comparable-risk bond is 12 percent?
(Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 14 years until maturity. You can purchase the bond for S895. a. What is the yleld to maturity con this bond? b. Should you purchase the bond if the yield to maturity on...
Please give YTM for both
P6-23 (similar to) Question Help Treasury notes and bonds. Use the information in the following table: Assume a $100,000 par value. What is the yield to maturity of the August 2000 Treasury note with semiannual payment? What is the yield to maturity of the February 2003 Treasury bond with semiannual payment? What is the yield to maturity of the August 2000 Treasury note? % (Round to three decimal places.) i Data Table (Click on the...
P10.8 (similar to) Which of the following bonds offers the highest current yield? a. A(n) 12.36%, 20-year bond quoted at 96.151. b. A(n) 20.60%, 15-year bond quoted at 160.252. c. A(n) 6.18%, 18-year bond quoted at 48.076. The current yield of the bond in part a is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. Clear All 2 parts
The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy an annual coupon bond with a coupon rate of 8.1 percent for $905. The bond has 8 years to maturity and a par value of $1,000. What rate of return do you expect to earn...
A(n) 9.2% bond matures in 5 years and has a current yield (not YTM) of 5.5%. The bond's current trading price is $ Do not round any intermediate work. Round your final answer to 2 decimal places (example: 1234.567 1234.57). Do not enter the $ sign. Margin of error for correct responses/lt/.05. NOTE: You should refer to the definition of "current yield" from your class notes. The definition in your textbook should be ignored, as it might cause confusion.
P10.10 (similar to) Question Help Caleb buys a(n) 10.95 % corporate bond with a current yield of 5.11%. When he sells the bond 1 year later, the current yield on the bond is 7.02 %. How much did Caleb make on this investment? ila The amount Caleb made on this investment is $ (Round to the nearest cent. nne- Srk b exte icure- Enter your answer in the answer box and then click Check Answer arn me Check Answr Clear...
1. What is the bond's yield to maturity?
2. What happens to the bond's yield to maturity if the bond
matures in 20 years?
3. What if it matures in 5 years?
(Yield to maturity) A bond's market price is $1,200. It has a $1,000 par value, will mature in 10 years, and has a coupon interest rate of 11 percent annual interest, but makes its interest payments semiannually. What is the bonds yield to maturity? What happens to the...
I JIMUI LUJ (Related to Checkpoint 9.2) (Yield to maturity) The market price is $850 for a 13-year bond ($1.000 par value) that pays 11 percent annual interest, but makes interest payments on a semiannual basis (5.5 percent semiannually). What is the bond's yield to maturity? The bond's yield to maturity is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. All narts showina javascriot:doExercise(4): Clear All Check Answer
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