Question

What is the percentage price change for a zero coupon bond if its YTM changes from 3.0% to 6.0%? The bonds face value is $1,
0 0
Add a comment Improve this question Transcribed image text
Answer #1

SOLUTION : Given, face value of bond = Lite [n ] = Maturity value = Yield 1 [y ] = Yield 2 [y] = $1000 4yrs $1000 3% 6% al t

Add a comment
Know the answer?
Add Answer to:
What is the percentage price change for a zero coupon bond if its YTM changes from...
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
  • What is the percentage price change for a zero coupon bond if its YTM changes from...

    What is the percentage price change for a zero coupon bond if its YTM changes from 3.2% to 5.7%? The bond's face value is $1,000 and it matures in 5 years. Use the price determined from the first yield, 3.2%, as the base in the percentage calculation. Round to the nearest tenth of a percent. (e.g., 4.32% = 4.3). ​[Hint: If the price dropped, enter a negative number].

  • I am sorry that I have uploaded more than one question, because I still have many...

    I am sorry that I have uploaded more than one question, because I still have many questions, but there are no more questions. I hope you can help me answer this question. If you can only answer one question, please do not answer this question, thank you. 1. 2 3 A zero-coupon bond has a face value of $1,000 and matures in 2 years. An auction reveals that investors require a(n) 7.0% annual return on this bond. What should be...

  • What is the percentage change in price for a zero coupon bond if the yield changes...

    What is the percentage change in price for a zero coupon bond if the yield changes from 6.5​% to 5.5​%? The bond has a face value of ​$1,000 and it matures in 10 years. Use the price determined from the first​ yield, 6.5​%, as the base in the percentage calculation.

  • Question 3 Homework. Unanswered A 6-year zero-coupon bond has a face value of $1,000. If its...

    Question 3 Homework. Unanswered A 6-year zero-coupon bond has a face value of $1,000. If its YTM changes from 3.6% to 5.1%, what is the resulting percentage change in its price? Use the price determined from the first yield, 3.6%, as the base in the percentage calculation. Round to the nearest hundredth of a percent. (e.g., 4.32% = 4.32). (Hint: If the price dropped, enter a negative number]. Numeric Answer: Unanswered 2 attempts left Submit Question 4 Homework. Unanswered What...

  • A zero-coupon bond with a 2-year maturity and face value of $1,000 is trading at $975....

    A zero-coupon bond with a 2-year maturity and face value of $1,000 is trading at $975. What is this bond's yield to maturity? Round to the nearest tenth of a percent (e.g. 4.32% = 4.3). Numeric Answer:

  • 1)   Cyberdyne Systems is issuing a series of zero coupon bonds to raise​ $500M to fund...

    1)   Cyberdyne Systems is issuing a series of zero coupon bonds to raise​ $500M to fund research and development at its Skynet division. Each bond will have a face value of ​$1,000 and will mature in 17 years. The yield on the bond is 4.5​%. What is the fair price for one of​ Cyberdyne's zero coupon​ bonds? The fair price for one of​ Cyberdyne's zero coupon bonds is ​$ 2) Suppose you purchase a zero coupon bond with a face...

  • 1)A Ford Motor Co. coupon bond has a coupon rate of 7​%, and pays annual coupons....

    1)A Ford Motor Co. coupon bond has a coupon rate of 7​%, and pays annual coupons. The next coupon is due tomorrow and the bond matures 40 years from tomorrow. The yield on the bond issue is 6.15​%. At what price should this bond trade​ today, assuming a face value of ​$1,000​? The price of the bond today should be ​$ 2) If the nominal rate of interest is 13.07% and the real rate of interest is 7.09 % what...

  • What is the yield to maturity (YTM) of a zero coupon bond with a face value...

    What is the yield to maturity (YTM) of a zero coupon bond with a face value of $1,000, current price of $920 and maturity of 3.5 years? Recall that the compounding interval is 6 months and the YTM, like all interest rates, is reported on an annualized basis. (Allow two decimals in the percentage but do not enter the % sign.)

  • Question 5 Homework. Unanswered A bond with a $1,000 face value has a 6% annual coupon...

    Question 5 Homework. Unanswered A bond with a $1,000 face value has a 6% annual coupon rate. The bond matures in 19 years. The current YTM on the bond is 4.5%. If this bonds' YTM were to increase to 5.9%, what would be the resulting price change in dollar terms? Round to the nearest cent. [Hint: 1) If the price drops, the change is a negative number. 2) Calculate the precise impact of a yield change on the bond's price...

  • An 8% semiannual coupon bond matures in 5 years. The bond has a face value of...

    An 8% semiannual coupon bond matures in 5 years. The bond has a face value of $1,000 and a current yield of 8.2296%. What are the bond's price and YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answer for the bond's price to the nearest cent and for YTM to two decimal places. Bond's price: $ YTM:

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