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
Homework Answers
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1.a. Calculate the price and
duration for the following bond when the going
rate of interest...
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
Show calculations, and write clearly. Please submit via Blackboard. l. (15 points) i 0- year Treasury...
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...
Bond Valuation Assignment A $1,000 par value bond, with a coupon interest rate of 8.4 percent...
Bond Valuation Assignment A $1,000 par value bond, with a coupon interest rate of 8.4 percent per year paid semiannually, matures in 24 years. Complete the table below by filling in the prices and YTM's that correspond to the given YTM's and prices respectively. You must show ALL WORK in part C (PVA, and PV calculations) and ALL calculator menu inputs in part D for full credit. PRICE YTM 0% b)$1.000 10% $598.139
Find the Macaulay's Duration of the following bond using a table of cash flows, present values,...
Find the Macaulay's Duration of the following bond using a table of cash flows, present values, etc. TTM = 4 years, Coupon rate = 6%, Par Value = $1,000, YTM = 8%, coupon is paid semiannually.
1. A bond with two years remaining until maturity offers a 3% coupon rate with interest...
1. A bond with two years remaining until maturity offers a 3% coupon rate with interest paid annually. At a market discount rate of 4%, find the price of this bond per 1000 of par value. 2. A bond offers an annual coupon rate of 5%, with interest paid semiannually. The bond matures in seven years. At a market discount rate of 3%, find the price of this bond per 1000 of par value. 3. A zero-coupon bond matures in...
38. The duration of a $1000, 2-year, 6% coupon bond (interest paid annually) is _____...
38. The duration of a $1000, 2-year, 6% coupon bond (interest paid annually) is _____ when market rates are 8%. The 8% PV factors are: .9259 1 YR; .8573 2 YR a. 2.036 b. 1.971 c. 1.94 d. 1.856 39. As bond maturity _________, so does the _________ and ________. a. decreases; coupon rate; market price. b. decreases; duration; face value. c. increases; duration; price variability. d. increases; market price; coupon rate.
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 %
7.3 value of the cash flows the asset is expected to produce. For a bond with...
7.3
value of the cash flows the asset is expected to produce. For a bond with fixed annual coupons, its value is equal to the present value of all its annual interest payments and its maturity The value of any financial asset is the present value as shown in the equation below: INT (1+r)^ M (1+ra) Bond's value=Ve=INT + INT. +...+ (1+ra)' (1+ra) INT + M = (1+ra)* (1+ra)N We could use the valuation equation shown above to solve for...
Calculate the duration for the following bond, remember: D =- INt* CFt Lt=1 (1 + r)t_t=1t...
Calculate the duration for the following bond, remember: D =- INt* CFt Lt=1 (1 + r)t_t=1t * PV+ _Et=1t * PV¢ EX=1 PVE t=1 (1 + r)t IN CE V Calculate the duration by filling out the table below. Then calculate the duration. t CFt DFt CFt * DFt CFt *t* DFt 8.0% 9.0% 101 102 103 104 105 106 107 Coupon Rate Rate of Return Semiannual Par Value Price Check Duration No $ 1,000 $961.10
5. An investor who owns a bond with a 9% coupon rate that pays interest semiannually...
5. An investor who owns a bond with a 9% coupon rate that pays interest semiannually and matures in three years is considering its sale. If the yield-to-maturity on the bond is 11%, find the price of the bond per 100 of par value. 6. A bond offers an annual coupon rate of 5%, with interest paid semiannually. The bond matures in seven years. At a market discount rate of 3%, find the price of this bond per 100 of...
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
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...
Bond Valuation Assignment A $1,000 par value bond, with a coupon interest rate of 8.4 percent per year paid semiannually, matures in 24 years. Complete the table below by filling in the prices and YTM's that correspond to the given YTM's and prices respectively. You must show ALL WORK in part C (PVA, and PV calculations) and ALL calculator menu inputs in part D for full credit. PRICE YTM 0% b)$1.000 10% $598.139
7.3
value of the cash flows the asset is expected to produce. For a bond with fixed annual coupons, its value is equal to the present value of all its annual interest payments and its maturity The value of any financial asset is the present value as shown in the equation below: INT (1+r)^ M (1+ra) Bond's value=Ve=INT + INT. +...+ (1+ra)' (1+ra) INT + M = (1+ra)* (1+ra)N We could use the valuation equation shown above to solve for...
Calculate the duration for the following bond, remember: D =- INt* CFt Lt=1 (1 + r)t_t=1t * PV+ _Et=1t * PV¢ EX=1 PVE t=1 (1 + r)t IN CE V Calculate the duration by filling out the table below. Then calculate the duration. t CFt DFt CFt * DFt CFt *t* DFt 8.0% 9.0% 101 102 103 104 105 106 107 Coupon Rate Rate of Return Semiannual Par Value Price Check Duration No $ 1,000 $961.10
5. An investor who owns a bond with a 9% coupon rate that pays interest semiannually and matures in three years is considering its sale. If the yield-to-maturity on the bond is 11%, find the price of the bond per 100 of par value. 6. A bond offers an annual coupon rate of 5%, with interest paid semiannually. The bond matures in seven years. At a market discount rate of 3%, find the price of this bond per 100 of...
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