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Suppose a State of New York bond will pay $1,000 ten years from now. If the...
15. Suppose a State of North Carolina bond will pay $1,000 ten years from now. If the going interest rate on these 10-year bonds is 5.5%, how much is the bond worth today?
1. You purchased a 6.25% bond 4 years ago at par. The bond matures 26 years from now and pays interest at the end of each 6 months. Similar bonds are being issued that pay 8.5% interest. What is your $1,000 bond worth today? 2. Rob Morrisey purchased a $1,000 bond that was quoted at 102.25 and paying 8 7/8% interest. How much did Rob pay for the bond? How much annual interest will be received?
The going rate of interest on a 5-year treasury bond is 4.25%. You have one that will pay $3,525 five years from now. How much is the bond worth today? Select the correct answer. a. $2,874.32 b. $2,862.72 c. $2,868.52 d. $2,880.12 e. $2,856.92
A $1,000 United States Treasury bond with a maturity date 20 years from now and a coupon rate of 5 percent has a required rate of return of 5 percent. Calculate the value of the bond if annual interest rate payment are in force. Show your data inputs. Strip the bond into an interest only bond and a face value only bond. That is, create a bond that has only the present value of the interest payments and one that...
2. Suppose a bond pays $1000 two years from now. The current market rate is 4% on the saving account. How much will pay for this if you purchase this bond today?
Suppose that you are considering the purchase of a coupon bond with a face value of $1,000 that matures after four years. The coupon payments are 6 percent of the face value per year. a. How much would you be willing to pay for this bond if the market interest rate (that is, the best alternative investment option) is also 6 percent? b. Suppose that you have just purchased the bond, and suddenly the market interest rate falls to 5...
Amara purchased a bond that will pay $50 a year forever, starting one year from now, if the interest rate r is positive and constant, how much is her bond worth today? 1. 50/r 2. 50/ (1+r) 3. 50 (1+r) 4. 50/(1+r+r2+m+)
Zero-coupon bonds: a. A ten-year, zero coupon bond trades at a Yield-to-Maturity (YTM) of 3.5%. Assume you buy $1000 worth of the bond today. How much will it be worth 10 years from now at maturity? b. A 5-year, zero coupon bond trades at a Yield-to-Maturity (YTM) of 2.5%. Assume you buy $1000 worth of the bond today. How much will it be worth 5 years from now at maturity? C. Assume you invest $1,131.41 today and receive $1,410.60 five...
2 Suppose that you are considering investing in a four-year bond that has a par value of $1,000 and a coupon rate of 6%. (a) Draw a timeline for this bond (b) What is the price of the bond if the market interest rate on similar bonds is 6%? what is the (c) Suppose that you purchase the bond, and the next day the market interest rate on similar (d) Now suppose that one year has gone by since your...
3. Suppose you buy a 3-year treasury note for $1,000 with a coupon rate of 2%. (a) If the risk-free rate remains at 2% for all treasury securities, how much could you sell this bond for after (i) 1 year, (ii) 2 years, (iii) 3 years? (b) If after 2 years you decide to sell this bond, how much would it be worth if the prevailing interest rate is (i) 1.5%, (ii) 3%? (c) Suppose after 1 year the interest...