A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon...

Question

Question

A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon and sells for $980. a. What is its yield to matu

Answer 1

Answer #1

a. PV = -980

FV = 1000

PMT = 1000 * 0.08 = 80

N = 10

CPT I/Y

I/Y = 8.3021334

Yield to amturity = 8.30%

b. Now, witn N = 5

I/Y = 8.3021334

PMT = 80

FV = 1000

CPT PV

PV = -988.032142

The price of the bond now is $988.03

Can you please upvote? Thank You :-)

Answer 2

Similar Homework Help Questions

7.6)A bond has a $1,000 par value, 8 years to maturity, and a 7% annual coupon...

7.6)A bond has a $1,000 par value, 8 years to maturity, and a 7% annual coupon and sells for $980. What is its yield to maturity (YTM)? Round your answer to two decimal places. % Assume that the yield to maturity remains constant for the next five years. What will the price be 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $
A bond has a $1,000 par value, 20 years to maturity, and an 8% annual coupon...

A bond has a $1,000 par value, 20 years to maturity, and an 8% annual coupon and sells for $1,110. What is its yield to maturity (YTM)? Round your answer to two decimal places. % Assume that the yield to maturity remains constant for the next 5 years. What will the price be 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $
A bond has a $1,000 par value, 20 years to maturity, and an 8% annual coupon...

A bond has a $1,000 par value, 20 years to maturity, and an 8% annual coupon and sells for $1,110. What is its yield to maturity (YTM)? Round your answer to two decimal places. % Assume that the yield to maturity remains constant for the next 5 years. What will the price be 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $

7.2 A bond has a $1,000 par value, 8 years to maturity, and a 6% annual...

7.2 A bond has a $1,000 par value, 8 years to maturity, and a 6% annual coupon and sells for $930. What is its yield to maturity (YTM)? Round your answer to two decimal places. % Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $
A bond has a $1,000 par value, 12 years to maturity, and a 9% annual coupon...

A bond has a $1,000 par value, 12 years to maturity, and a 9% annual coupon and sells for $1,110. What is its yield to maturity (YTM)? Round your answer to two d Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
7.02 A bond has a $1,000 par value, 12 years to maturity, and a 9% annual...

7.02 A bond has a $1,000 par value, 12 years to maturity, and a 9% annual coupon and sells for $1,110. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. b. Assume that the yield to maturity remains constant for the next three years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

YIELD TO MATURITY AND FUTURE PRICE A bond has a $1,000 par value, 20 years to...

YIELD TO MATURITY AND FUTURE PRICE A bond has a $1,000 par value, 20 years to maturity, and a 5% annual coupon and sells for $860. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. b. Assume that the yield to maturity remains constant for the next 5 years. What will the price be 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
Yield to maturity and future price A bond has a $1,000 par value, 15 years to...

Yield to maturity and future price A bond has a $1,000 par value, 15 years to maturity, and a 8% annual coupon and sells for $1,080. What is its yield to maturity (YTM)? Round your answer to two decimal places. % Assume that the yield to maturity remains constant for the next 2 years. What will the price be 2 years from today? Round your answer to the nearest cent. $
1, Madsen Motors's bonds have 10 years remaining to maturity. Interest is paid annually; they have...

1, Madsen Motors's bonds have 10 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 10%; and the yield to maturity is 11%. What is the bond's current market price? Round your answer to the nearest cent. 2, YIELD TO MATURITY AND FUTURE PRICE A bond has a $1,000 par value, 8 years to maturity, and a 7% annual coupon and sells for $980. What is its yield to maturity...

BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 7% annual...

BOND RETURNS Last year Janet purchased a $1,000 face value corporate bond with an 7% annual coupon rate and a 10-year maturity. At the time of the purchase, it had an expected yield to maturity of 9.3%. If Janet sold the bond today for $1,026.98, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places. % BOND VALUATION Madsen Motors's bonds have 12 years remaining to...