Homework Answers
Yield to Maturity
= C + FV - PV /n/FV+PV/2
= 7+ 109-28/0.67/109+28/2
= 7 + 81/0.67 / 137/2
=7+120.90 / 68.5
= 127.90 / 68.5
= 1.87 %
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8) Calculate the yield to maturity for the following...
Question 28 Calculate the price change for a 1-percent decrease in market yield for the following...
Question 28
Calculate the price change for a 1-percent decrease in market
yield for the following bond: par = $1,000; coupon rate = 7
percent, paid semi-annually; market yield = 7 percent; term to
maturity = 9 years. (Round present value factor
calculations to 5 decimal places, e.g. 1.25124 and the final answer
to 4 decimal places, e.g. 1,564.2556.)
Change in price
$
Practice Question 7
Which bond is most likely to see the smallest fluctuations in
its market price...
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Question 28
Calculate the price change for a 1-percent decrease in market
yield for the following bond: par = $1,000; coupon rate = 7
percent, paid semi-annually; market yield = 7 percent; term to
maturity = 9 years. (Round present value factor
calculations to 5 decimal places, e.g. 1.25124 and the final answer
to 4 decimal places, e.g. 1,564.2556.)
Change in price
$
Practice Question 7
Which bond is most likely to see the smallest fluctuations in
its market price...
Return to question A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 1392 and modified duration of 11.34 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration -12.30 years--but considerably higher convexity of 272.9. 1.25 points a. Suppose the yield to maturity on both bonds increases to 9% IWhat will be the actual percentage...
Calculate the yield to maturity on the following bonds: a. A 8.3 percent coupon (paid semiannually) bond, with a $1,000 face value and 23 years remaining to maturity. The bond is selling at $900 $914 $1,064. b. An 5.4 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at .An 7.4 percent coupon (paid annually) bond, with a $1,000 face value and 8 years remaining to maturity. The bond...
Problem 3-10 (LG 3-2) Calculate the yield to maturity on the following bonds a. A 8.9 percent coupon (paid semiannually) bond, with a $1,000 face value and 13 years remaining to maturity. The bond is selling at $930. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Yield to maturity % per year b. An 6 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is...
A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 139.2 and modified duration of 11.34 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration--12.30 years--but considerably higher convexity of 272.9. a. Suppose the yield to maturity on both bonds increases to 9%. What will be the actual percentage capital loss on each bond? il...
A 13.05-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 1572 and modified duration of 12.08 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration--12.30 years—but considerably higher convexity of 272.9. a. Suppose the yield to maturity on both bonds increases to 9%. 1. What will be the actual percentage capital loss on each bond?...
A 13.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 161.9 and modified duration of 12.27 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration-12.30 years-but considerabl higher convexity of 272.9 a. Suppose the yield to maturity on both bonds increases to 9%. What will be the actual percentage capital loss on each bond? What...
Question 4: (10 points). (Yield to maturity) A bond's market price is $950. It has a $1,000 par value, will mature in 14 years, and has a coupon interest rate of 8 percent annual interest, but makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 28 years? What if it matures in 7 years? (Round to two decimal places.) The bond's yield to maturity...
Calculate the yield to maturity on the following bonds: a. A 8.2 percent coupon (paid semiannually) bond, with a $1,000 face value and 22 years remaining to maturity. The bond is selling at $895. b. An 5.3 percent coupon (paid quarterly) bond, with a $1,000 face value and 10 years remaining to maturity. The bond is selling at $915. c. An 7.3 percent coupon (paid annually) bond, with a $1,000 face value and 8 years remaining to maturity. The bond...
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