Homework Answers
(1)
Value of a coupon bond is the total present value of its cash flows. The cash flows are the coupon payments and the face value receivable on maturity.
The present value of each cash flow is calculated by discounting the cash flow amount by the discount rate. This discount rate is the yield to maturity of the bond, or the required return of the bond's investors.
Coupon payment = face value of bond * coupon rate (annual coupon payments)
Coupon payment = face value of bond * coupon rate / 2 (semi-annual coupon payments)
In case of a semiannual coupon bond, the discount rate used to calculate the value of the bond is the semiannual YTM, or the semiannual discount rate, since the cash flows occur semiannually.
Add Answer to:
as part of the previous post, please help question 5,6 and
7
(1) How is the...
please help to calculate discount yield, YTM, Holding period yield and Capital Gain. I have done...
please help to calculate discount yield, YTM, Holding period
yield and Capital Gain. I have done the rest. This question is
intended for personal knowledge and not for assignment
purposes.
of QUESTIUN 3: upum URT eyr Assume that a 10-year bond with a face value of Tshs 100,000 is selling at a discount price of Tshs 95,000. It has an annual coupon income of Tshs 10,000. The investor plar to sell it after 5 years at a price of Tshs...
1. 7-4: Bond Yields Yield to call Seven years ago the Singleton Company issued 22-year bonds...
1. 7-4: Bond Yields Yield to call Seven years ago the Singleton Company issued 22-year bonds with a 12% annual coupon rate at their $1,000 par value. The bonds had a 7% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places. % Explain why the...
I need help with answering questions e though I please. Step by step. in each case...
I
need help with answering questions e though I please. Step by
step.
in each case in the preceding quesHoh? f. Suppose that the bond described in part (e) is callable i five years at a cal price equal to $1,090. What is the YTC on the bond if its n $8872 What is the YTC on the same bond if its current mark $1,134.20? e bond if its current market D g. What is interest rate price risk? Which...
Bond Valuation Assume that you are considering the purchase of a 20-year, non- callable bond with...
Bond Valuation Assume that you are considering the purchase of a 20-year, non- callable bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 8.4% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? Yield to Maturity Radoski Corporation's bonds make an annual coupon interest payment of 7.35%. The bonds have a...
(Chapter 4): Solomon Brothers You are working at the fixed-income sector of Solomon Brothers. You were...
(Chapter 4): Solomon Brothers You are working at the fixed-income sector of Solomon Brothers. You were asked to prepare a quiz for the new interns to assess their knowledge of bonds. To evaluate interns’ ability to apply their knowledge to real world, you would like to have the interns to analyze risk as well. Please calculate the following bond values, Yield to Maturity, current yield and capital gains. Value of 10-year, 10% coupon, semiannual bond if rd = 13%. Value...
please explain how to calculate in a financial calculator Question 2. MTV Corporation has 7 percent coupon bonds on...
please explain how to calculate in a financial
calculator
Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8 years left to maturity. The bonds make semi-annual interest payments. If the market interest rate on these bonds is 6 percent, what is the current bond price? Question 3. Jones Corporation has zero coupon bonds on the market with a par of $1,000 and 8 years left to maturity. If the market...
par value bonds
1.A 30-year, $1,000 par value bond has a 9.5% annual payment coupon. The bond currently sells for $875. If the yield to maturity remains at its current rate, what willthe price be 9 years from now?2.Knapp Bros, LLC is planning to issue new 20-year bonds. The current plan is to make the bonds non-callable, but this may be changed. If the bonds are made callableafter 7 years at a 7% call premium, how would this affect their required rate of...
I need help answering E - I. Step by step. None of it makes sense to...
I need help answering E - I. Step by step. None of it makes
sense to me.
Campbell and Carol Morris are senior vice presidents of Chicago Insurance Company. They are fund management division, with Campbell having resp income securities (primarily bonds) ments. A major new client, Mutual of Chicago present an investment seminar to the mayors of t sented cities. Campbell and Morris, who will make the actual presentation, have asked you to help them by answering the following...
Please explain how this answer was determined using formulas or a financial calculator if applicable. Especially...
Please explain how this answer was determined using formulas or
a financial calculator if applicable. Especially part A.
Thanks!
8. Croft Inc, bonds have a par value of $1,000. The bonds have a 4% coupon rate and will mature in 10 years. Assume the bond is semi-annual a. Calculate the price if the yield to maturity on the bonds is 7, 8, and 9 percent, respectively. b. Explain the impact on price if the required rate of return decreases. c....
my question is Q 29, zero coupon bonds ( part b and c continue on next...
my question is Q 29, zero coupon bonds ( part b and c continue
on next page), thank you so much !
IOU (OU) 5.7 Apr 19, 2028 108.96 ?? 1.827 27. Bond Prices versus Yields [LO2) a. What is the relationship between the price of a bond and its YTM? b. Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon...
please help to calculate discount yield, YTM, Holding period
yield and Capital Gain. I have done the rest. This question is
intended for personal knowledge and not for assignment
purposes.
of QUESTIUN 3: upum URT eyr Assume that a 10-year bond with a face value of Tshs 100,000 is selling at a discount price of Tshs 95,000. It has an annual coupon income of Tshs 10,000. The investor plar to sell it after 5 years at a price of Tshs...
I
need help with answering questions e though I please. Step by
step.
in each case in the preceding quesHoh? f. Suppose that the bond described in part (e) is callable i five years at a cal price equal to $1,090. What is the YTC on the bond if its n $8872 What is the YTC on the same bond if its current mark $1,134.20? e bond if its current market D g. What is interest rate price risk? Which...
Bond Valuation Assume that you are considering the purchase of a 20-year, non- callable bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 8.4% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? Yield to Maturity Radoski Corporation's bonds make an annual coupon interest payment of 7.35%. The bonds have a...
please explain how to calculate in a financial
calculator
Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8 years left to maturity. The bonds make semi-annual interest payments. If the market interest rate on these bonds is 6 percent, what is the current bond price? Question 3. Jones Corporation has zero coupon bonds on the market with a par of $1,000 and 8 years left to maturity. If the market...
I need help answering E - I. Step by step. None of it makes
sense to me.
Campbell and Carol Morris are senior vice presidents of Chicago Insurance Company. They are fund management division, with Campbell having resp income securities (primarily bonds) ments. A major new client, Mutual of Chicago present an investment seminar to the mayors of t sented cities. Campbell and Morris, who will make the actual presentation, have asked you to help them by answering the following...
Please explain how this answer was determined using formulas or
a financial calculator if applicable. Especially part A.
Thanks!
8. Croft Inc, bonds have a par value of $1,000. The bonds have a 4% coupon rate and will mature in 10 years. Assume the bond is semi-annual a. Calculate the price if the yield to maturity on the bonds is 7, 8, and 9 percent, respectively. b. Explain the impact on price if the required rate of return decreases. c....
my question is Q 29, zero coupon bonds ( part b and c continue
on next page), thank you so much !
IOU (OU) 5.7 Apr 19, 2028 108.96 ?? 1.827 27. Bond Prices versus Yields [LO2) a. What is the relationship between the price of a bond and its YTM? b. Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon...
Most questions answered within 3 hours.
-
Part 1. Primitive Types, Sorting, Recursion for
Homework.java
a) Implement the static method initializeArray that receives...
asked 2 minutes ago -
Derive ground state term symbols. Use notation 2S(1/2) for state
2S1/2
a) d5
b) f3
c)...
asked 22 minutes ago -
A sample of size 31 will be drawn from a population with mean 39
and standard...
asked 1 hour ago -
What is the effect on the P-value when a test is changed from a
two-tailed hypothesis...
asked 1 hour ago -
I wish to estimate µ, the mean of a population. After I collect
and an-
alyze...
asked 1 hour ago -
At a local university, you poll a group of 115 students and find
that 37 of...
asked 1 hour ago -
Gladstone company tracks the number of units purchased and sold
throughout each accounting period but applies...
asked 1 hour ago -
When determining if a molecule's configuration is E or Z, what
determines the higher priority groups?
asked 1 hour ago -
13. What is the amount
of conversion cost transferred to finished goods? (Round
your intermediate calculations...
asked 1 hour ago -
Sulfuric Acid is a "strong" acid, but only releases a single
proton when it dissolves. What...
asked 1 hour ago -
The
second floor of a house is 6 m above the street level. How much
work...
asked 1 hour ago -
What uncontrollable factor(s) contributed to Hong Kong Disney’s
poor performance during its first year?
asked 1 hour ago