Question

You buy a 20-year bond with a coupon rate of 7.8% that has a yield to...

You buy a 20-year bond with a coupon rate of 7.8% that has a yield to maturity of 9.9%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.9%. What is your return over the 6 months?

0 0
Add a comment Improve this question Transcribed image text
Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

AS NOTHING WAS MENTIONED, BA II PLUS USED TO SOLVE THE PROBLEM1 Ale $ w ? 1x ENG 23:05 06-02-2020 25 X fix BH151 2 146 BA BB BC BD BE BE BG BH BI 147 BA II PLUS set C/Y= P/Y = 148 149 150

Add a comment
Know the answer?
Add Answer to:
You buy a 20-year bond with a coupon rate of 7.8% that has a yield to...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • You buy a 20-year bond with a coupon rate of 9.8% that has a yield to maturity of 10.9%. (Assume ...

    You buy a 20-year bond with a coupon rate of 9.8% that has a yield to maturity of 10.9%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 11.9%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Please Explain Answer

  • You buy a 20-year bond with a coupon rate of 8.4% that has a yield to...

    You buy a 20-year bond with a coupon rate of 8.4% that has a yield to maturity of 9.4%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.4%. What is your return over the 6 months? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return %

  • You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000...

    You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.7%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return

  • You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 a...

    You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.7%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return = %

  • Please show step by step BA II plus calculator You buy a 20-year bond with a...

    Please show step by step BA II plus calculator You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.5%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.5%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.)

  • You buy a bond for $997 that has a coupon rate of 6.30% and a maturity...

    You buy a bond for $997 that has a coupon rate of 6.30% and a maturity of 6-years. A year later, the bond price is $1,192. (Assume a face value of $1,000 and annual coupon payments.) a. What is the new yield to maturity on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is your rate of return over the year? (Do not round intermediate calculations. Enter your...

  • You buy a bond for $985 that has a coupon rate of 5.50% and a maturity...

    You buy a bond for $985 that has a coupon rate of 5.50% and a maturity of 8-years. A year later, the bond price is $1,160. (Assume a face value of $1,000 and annual coupon payments.) a. What is the new yield to maturity on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is your rate of return over the year? (Do not round intermediate calculations. Enter your...

  • d. Assume that you have a one-year coupon bond with a face value of $1,000 and...

    d. Assume that you have a one-year coupon bond with a face value of $1,000 and a coupon payment of $50. What is the price of the bond if the yield to maturity is 6%? e. Assume that you have the same bond is in part d, except instead of paying one annual payment of $50, the bond pays two semi-annual payments of $25 (one six months from now and another payment in twelve months). What is the price of...

  • Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon rate of 9.5%. The bond...

    Assume that you are considering the purchase of a 20-year, noncallable 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 10.7% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

  • Assume that you are considering the purchase of a 20-year bond with an annual coupon rate...

    Assume that you are considering the purchase of a 20-year bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000, and it makes semiannual coupon payments. If you require an 9.8% simple annual nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? a. $1,090.77 b. $973.91 c. $1,168.69 d. $1,061.56 e. $925.21

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT