You are considering a 20-year federal government bond with face value $10,000 and a coupon rate...
You are considering a 20-year federal government bond with face value $10,000 and a coupon rate of 4%. If you want the yield to maturity of the bond to be 7%, how much should you pay (in $) to purchase the bond?
Homework Answers
YTM is calculated as follows- 
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You are considering a 20-year federal government bond with face
value $10,000 and a coupon rate...
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. You require a 12% nominal yield to maturity on this investment.
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. You require a 12% nominal yield to maturity on this investment.If the bond makes annual interest payments, what is the maximum price you should be willing to pay for the bond?If the bond makes semiannual interest payments, 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, 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
The US government just issued a bond with a $10,000 face value and a coupon rate...
The US government just issued a bond with a $10,000 face value and a coupon rate of 4%. If the bond has a life of 25 years, pays semi-annual coupons, and the yield to maturity is 3%, what is the present value of the bond? Show the values for the buttons that you have pushed.
You purchase a 30-year bond today with a $10,000 face value that makes annual coupon payments...
You purchase a 30-year bond today with a $10,000 face value that makes annual coupon payments at a 6% coupon rate (a) If the yield to maturity on 30 year bonds at the time of purchase was 5%, how much did you pay for the 30 year bond? (b) After holding the bond for 1 year, you find that the yield to maturity on 29 year bonds is 6%. What s new price of your bond and what has been...
Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon...
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?
Consider a 30-year bond that has a face value of $10,000 and a coupon rate of...
Consider a 30-year bond that has a face value of $10,000 and a coupon rate of 9% with quarterly coupon payments. The yield to maturity (YTM) of the bond is 4%. a. What is the maximum price would you be willing to pay for this bond right now? b. What is the maximum price would you be willing to pay for this bond right after its 14thcoupon payment? c. What is the maximum price would you be willing to pay...
Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon...
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 9.5% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? a. $1,140.00 b. $1,010.00 c. $1,000.00 d. $1,220.00 e. $980.00
You are considering a bond with a face value of $1 000 and a coupon rate...
You are considering a bond with a face value of $1 000 and a coupon rate of 2.0%. The bond has 16 year until maturity and coupon payments are paid semiannually. The yield to maturity on similar securities in the market is 8.3% What is the current price of this bond?
Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon...
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 9.5% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond? a. $1,140.00 b. $1,010.00 c. $1,000.00 d. $1,220.00 e. $980.00 A. a B. b C. c D. d E. e
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
You purchase a 30-year bond today with a $10,000 face value that makes annual coupon payments at a 6% coupon rate (a) If the yield to maturity on 30 year bonds at the time of purchase was 5%, how much did you pay for the 30 year bond? (b) After holding the bond for 1 year, you find that the yield to maturity on 29 year bonds is 6%. What s new price of your bond and what has been...
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