Capital yield =985-900 =85
Coupon yield =10%*1000 =100
Rate of return =(85+100)/900 =20.56%
13. A 10-year, 10.00% coupon bond with a face value of $1,000 is currently selling for...
A one-year discount bond with a face value of $1,000 that is currently selling for $900 has an interest rate of A. 5.26%. B. 10%. C. 11.1%. D. 100%.
A two-year bond with face value $1,000 and annual coupon payment of $100 is priced at $1,000. If the one-year interest rate next year turns out to be 13%. What will be the realized compound yield? 9.91% 10.09% 10.00% 10.14%
8. A 15-year bond with a face value of $1,000 currently sells for $900. Which of the following CORRECT? a. The bond's coupon rate exceeds its current yleld. b. The bond's yield to maturity or discount rate is more than its coupon rate. e. The bond's yield to maturity or discount rate is less than its coupon rate. d. The bond's current yield is equal to its coupon rate. e. If the yield to maturity stays constant until the bond...
A bond has a face value of $1,000. The coupon rate is 7.2% (expressed as an annual percentage rate with semi-annual compounding). There are 2 coupon payments per year and the bond will mature in 4 years. The price is $985. A coupon payment has just been made and the next coupon payment for this bond is in 6 months. An investor buys the bond today and sells the bond in 2 years’ time, just after a coupon payment. When...
A 10-year bond pays 5% on a face value of $1,000. If similar bonds are currently yielding 10%, what is the market value of the bond? (5 marks) (b) Anfield Ltd bonds are currently selling for $1.200 per S1000 par-value bond. The bonds have a 10% coupon rate and will mature in 10 years. What is the approximate yield to maturity? (5 marks) (c) Kenanga Investment Bank is evaluating an equity. Recently, Malaysia government's risk free rate is 3.5%. Calculate...
1-(a) Consider a bond with a $1,000 face value and a 10 percent coupon rate with semiannual payments matures in 15 years. Determine the value of the bond to a friend of yours with a required rate of return of 13% (2 points) 1-(b) A zero coupon bond with a risk similar to part (a), is $1,000 and matures in 15 years. Your friend asks you which bond she should invest in, the zero coupon selling for $120. The bond...
The 10-year Coupon Bond has a face value of $1,000, the annual coupon rate is 5 percent (out of its face value), the yield to maturity is 10 percent. (2.a) show me the cash flows of this coupon bond, you can use words or a timeline graph you created. (2.b) compute the price (present value) of this bond (2.c) suppose the yield to maturity increases to 20 percent after one year, computes the new price. (remember that as time passed...
A 10-year bond that has a 12 percent coupon rate is currently selling for $1,000, which equals the bond's face value. If interest is paid semiannually, the bond's yield to maturity is (a) equal to 12%. (b) greater than 12%. (c) less than 12%. (d) More information is needed to answer this question. (e) None of the above is correct.
How do you find the PMT? Problem 2 (Bond Valuation) You consider purchasing a $1,000 face value 5-year semiannual coupon hand $1.000 face value 5-year semiannual coupon bond which currently sells for $1,040.13 at the bond market. The coupon rate is 9%. Given that your annual required rate of return to purchase this bond is 8.1%,
Maroon Two Inc. would like to issue 10,000 coupon bonds with face value of $1,000, coupon rate of 9%, semi-annual coupon payment, and maturity of 10 years. Bonds in the market with similar maturity and risk-level are currently selling for $985. What will be the yield to maturity on Maroon Two bonds?