Consider a $3000 par value bond that pays 5 annual coupons at a nominal rate of 4% compounded annually. Suppose that the bond was purchased for $2981.91.
a) Price using the Method of Averages yield = $ ____
b) Rate of Change of Price (to 2 decimals) using the Method of Averages yield = $ ____ per % change
Consider a $3000 par value bond that pays 5 annual coupons at a nominal rate of...
Consider a 2-year $1000 par value bond that pays semi-annual coupons at a rate of 42) purchased for $1058.82 6%. Suppose that the bond was (a) Use the method of averages to approximate the effective yield rate compounded semi-annually. State the result as a percent to 1 decimal place % compounded semi-annually (b) Complete the chart below by performing 2 iterations of the bisection method to approximate the effective yield rate compounded semi-annually [Note: For the initial interval [a(0),b(0) use...
Consider a 2-year $4000 bond that's redeemable at par and pays semi-annual coupons at a rate of c2) 8%. 70. (a) Suppose that the yield rate is 4% compounded annually. Determine: The purchase price of the bond. P = $ %3D The bond's duration to 3 decimals. D: years %3| Note: Use the purchase price to the closest cent in your duration calculation. (b) Suppose that the yield rate is 4% compounded semi-annually. Determine: The purchase price of the bond....
Dave purchased a 10-year par value bond with semiannual coupons at a nominal annual rate of 4% convertible semiannually at a price of 1021.50. The bond can be called at par value F on any coupon date starting at the end of year 5. The price guarantees that Dave will receive a nominal annual rate of interest convertible semiannually of at least 6%. Determine whether the bond was bought at par, at a discount, or at a premium. at a...
A 15 year bond has a par-value of 500 and pays semi-annual coupons at a 7% rate. An investor purchases the bond at a price such that its yield to maturity is 6% convertible semi-annually. The investor sells the bond immediately after 8th payment at a price such that its new owner's yield to maturity is 5% convertible semi-annually. What was the original investor's yield convertible semi-annually on this investment over the 4-year period?
7. A $20,000 par value bond matures on January 1, 2020. The bond pays coupons at the annual rate of 7%, payable semiannually (every January 1 and July 1 until maturity). The nominal annual yield to maturity is 10% compounded semiannually. Find the price of the bond on August 25, 2005. Solve this problem theoretically.
A coupon bond with a par value of $1,000 and a 10-year maturity pays semiannual coupons of $21. (a) Suppose the yield for this bond is 4% per year compounded semiannually. What is the price of the bond? (b) Is the bond selling above or below par value? Why?
4.1.2 Atwelve-year 100 par value bond pays 7% coupons semiannually. The bond is priced at 115.84 to yield an annual nominal rate of 6% compounded semiannually. Calculate the redemption value of the bond.
Donald purchases a 15-year bond that pays semi-annual coupons at 5% annual coupon rate. He pays 2,345 for the bond, which can be called at its par value X on any coupon date starting at the end of year 10. The price guarantees that Donald will receive a yield of at least 4% convertible semi-annually. Joe purchases a 15 year bond identical to Donald's, except it is not callable. Assuming the same yield, what is the price of Joe's bond.
(1 point) A 10 year $11 000 par-valued bond pays monthly coupons. If the yield rate is y 12-9% and the purchase price is $7381.84, what is the coupon rate c12? Answer: (1 point) Two bonds, each with a face value of $13000, are redeemable at par in t-years and priced to yield y4-8%. Bond 1 of P? has a coupon rate c4-11.8% and sells for $15628.24. Bond 2 has coupon rate c-5% and sells for S R What is...
Consider a 5-year bond with a face value of 100 USD/bond that pays coupons every six months. It has a yield to maturity of 4.0400% and an annual coupon rate of 4.0000%. What is the bond’s price if there are no arbitrage opportunities? (Input your answer with 4 decimals)