Le MULLIIy payment: 8. Consider a 8-year, $1,000 par, 4% bond that pays semi-annual coupons. What...

Question

Question

Answer 1

Answer #1

Price of bond is the present value of future cash flows which is calculated as follows:

Present value of cash flows	=-pv(rate,nper,pmt,fv)	Where,
	= $ 934.72	rate	=	2.50%
		nper	=	16
		pmt	=	$ 20.00
		fv	=	$ 1,000.00


So,
Price of bond is $ 934.72

Answer 2

Similar Homework Help Questions

Consider a 8-year, $1,000 par, 4% bond that pays semi-annual coupons. What is the price of...

Consider a 8-year, $1,000 par, 4% bond that pays semi-annual coupons. What is the price of this bond if interest rate is 5%?
A 15 year bond has a par-value of 500 and pays semi-annual coupons at a 7% rate. An investor purchases the bond at a pri...

A 15 year bond has a par-value of 500 and pays semi-annual coupons at a 7% rate. An investor purchases the bond at a price such that its yield to maturity is 6% convertible semi-annually. The investor sells the bond immediately after 8th payment at a price such that its new owner's yield to maturity is 5% convertible semi-annually. What was the original investor's yield convertible semi-annually on this investment over the 4-year period?
Consider a 2-year $4000 bond that's redeemable at par and pays semi-annual coupons at a rate...

Consider a 2-year $4000 bond that's redeemable at par and pays semi-annual coupons at a rate of c2) 8%. 70. (a) Suppose that the yield rate is 4% compounded annually. Determine: The purchase price of the bond. P = $ %3D The bond's duration to 3 decimals. D: years %3| Note: Use the purchase price to the closest cent in your duration calculation. (b) Suppose that the yield rate is 4% compounded semi-annually. Determine: The purchase price of the bond....

Consider a bond with the following characteristics. Par: $1,000 Two coupon payments per year (i.e., coupons...

Consider a bond with the following characteristics. Par: $1,000 Two coupon payments per year (i.e., coupons are paid semi-annually) Coupon rate: 4.00% Years to maturity: 8 Bond price: $1,000 Suppose that the annual market interest rate for this bond drops by 1%. What is the new bond price? Note: recall that the annual yield-to-maturity (YTM) is the market interest rate on the bond. $1,070.66 $1,000.00 $934.72
Donald purchases a 15-year bond that pays semi-annual coupons at 5% annual coupon rate. He pays...

Donald purchases a 15-year bond that pays semi-annual coupons at 5% annual coupon rate. He pays 2,345 for the bond, which can be called at its par value X on any coupon date starting at the end of year 10. The price guarantees that Donald will receive a yield of at least 4% convertible semi-annually. Joe purchases a 15 year bond identical to Donald's, except it is not callable. Assuming the same yield, what is the price of Joe's bond.
(1 point) A 9 year $11000 par-valued bond pays semi-annual coupons. If the yield rate is...

(1 point) A 9 year $11000 par-valued bond pays semi-annual coupons. If the yield rate is y2 = 10% and the purchase price is $7656.78, what is the coupon rate cz?

Consider a bond with the following characteristics: Semi-annual payments, coupon rate of 8%, $1,000 par value....

Consider a bond with the following characteristics: Semi-annual payments, coupon rate of 8%, $1,000 par value. 6 years to maturity. Discount rate (Interest rate) is r= 5%. If 95 days have passed since the last coupon payment, what is the accrued interest? Consider 182 days between payments. a) Calculate the flat price of the bond. b) Calculate the accrued interest. c) Calculate the invoice price.
(1 point) A 7 year $16000 par-valued bond pays semi-annual coupons. If the yield rate is...

(1 point) A 7 year $16000 par-valued bond pays semi-annual coupons. If the yield rate is y2 is $11882.17, what is the coupon rate c2? 10% and the purchase price Answer:
Sue purchases a 10-year coupon bond with semi-annual coupons at a nominal annual rate of 4% convertible semi-annually at a price of $1,021.50. The bond can be called at its par value X on any coupon d...

Sue purchases a 10-year coupon bond with semi-annual coupons at a nominal annual rate of 4% convertible semi-annually at a price of $1,021.50. The bond can be called at its par value X on any coupon date beginning at the end of year 5. The price at which Sue purchases the bond guarantees that Sue will receive a nominal annual rate of interest convertible semi-annually at 6%. What is X?

Consider a 2-year $1000 par value bond that pays semi-annual coupons at a rate of 42)...

Consider a 2-year $1000 par value bond that pays semi-annual coupons at a rate of 42) purchased for $1058.82 6%. Suppose that the bond was (a) Use the method of averages to approximate the effective yield rate compounded semi-annually. State the result as a percent to 1 decimal place % compounded semi-annually (b) Complete the chart below by performing 2 iterations of the bisection method to approximate the effective yield rate compounded semi-annually [Note: For the initial interval [a(0),b(0) use...