Calculate the rate of capital gain or loss on a 10-year zero-coupon bond for which the...
Calculate the rate of capital gain or loss on a 10-year zero-coupon bond for which the interest rate has increased from 10% to 20%. The bond has a face value of $1,000.
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Calculate the rate of capital gain or loss on a 10-year
zero-coupon bond for which the...
19. You purchase a 5-year and 10%-coupon rate bond with face amount of $1,000 at par value. One year later, market inter...
19. You purchase a 5-year and 10%-coupon rate bond with face amount of $1,000 at par value. One year later, market interest rate increases from 10% to 20%, what is the rate of capital gain for the bond? (A) -40.3%. (B) -29.5%. (C) -25.9%. (D) -30.3%. (E) -15.9% 20.Refer to Q19, what is the rate of return for the bond? (A) -40.3%. (B) -38.4%. (C) -25.9%. (D) -30.3%. (E) -15.9%.
A 9-year zero coupon bond with a $1,000 face value has an interest rate of 3.6%...
A 9-year zero coupon bond with a $1,000 face value has an interest rate of 3.6% per year. What would be the change in the bonds value if the 9-year interest rate were to rise by 34 basis points. (Remember: your answer should not quote in percent or basis points.)
5. Presume you purchased a 10 year year bond for $1,000, which has a face value...
5. Presume you purchased a 10 year year bond for $1,000, which has a face value of $1000.00. The bond pays an annual coupon of $60.00 and has an interest rate (Yeild to maturity) of of 6%. Presume you decide to sell the bond after 1 year for $1100.00. This means you sold a 9 year bond. Given the above information what is your holding period return? 6. Given the same information as listed in question 5, presume the yield...
Consider a 2-year coupon bond that pays coupon annually with a coupon rate of 3%, face...
Consider a 2-year coupon bond that pays coupon annually with a coupon rate of 3%, face value $1000, a yield to maturity of 4%. (a) What is the approximated bond price estimated by both duration and convexity if the yield is increased by 0.5%? (b) Suppose you purchased 1 unit of the above coupon bond mentioned above and is worried if the interest rate will increase. You are considering taking short position on a zero coupon bond. The zero coupon...
All rates are annual. The one-year zero coupon rate is 3%. The two year zero-coupon rate...
All rates are annual. The one-year zero coupon rate is 3%. The two year zero-coupon rate is 4%. The price of a two-year 3% coupon bond with the face value of $1,000 is $ ………{A}……… (accuracy to one cent).
A 2-year zero coupon bond with a $1,000 face value has an interest rate of 3.5%...
A 2-year zero coupon bond with a $1,000 face value has an interest rate of 3.5% per year. What would be the change in the bonds value if the 2-year interest rate were to rise by 35 basis points. (Remember: your answer needs to have a negative sign if the number is negative and should not quote in percent or basis points.)
You purchased a zero coupon bond one year ago for $296.50. The market interest rate is...
You purchased a zero coupon bond one year ago for $296.50. The market interest rate is now 6.5 percent. If the bond had 15 years to maturity when you originally purchased it, what is your total return to date if the face value of the bond is $1,000? (Hint: Use the information provided to calculate the price of the zero coupon bond today.) A) 37.74 percent B) 27.40 percent C) 23.35 percent D) 19.95 percent E) 32.58 percent
An investor purchased a 10 year zero coupon bond with 10% ytm. The interest rate for...
An investor purchased a 10 year zero coupon bond with 10% ytm. The interest rate for the bond increased by 1% right after he purchased the bond. What will be the investors realized rate of return if he holds the bond to maturity?
2. You are considering purchasing a 10 year bond with a face value of $1000 with...
2. You are considering purchasing a 10 year bond with a face value of $1000 with an annual coupon of $55.00. The current interest rate is 6%, what would you expect to pay for the bond? 3. What is the current yield on a 1 year bond $100 coupon bond which you pay $98.00 for with an annual coupon payment of $6.00. 4. Assuming the same coupon payment as listed in question 3 but now the price you pay for...
1-(a) Consider a bond with a $1,000 face value and a 10 percent coupon rate with...
1-(a) Consider a bond with a $1,000 face value and a 10 percent coupon rate with semiannual payments matures in 15 years. Determine the value of the bond to a friend of yours with a required rate of return of 13% (2 points) 1-(b) A zero coupon bond with a risk similar to part (a), is $1,000 and matures in 15 years. Your friend asks you which bond she should invest in, the zero coupon selling for $120. The bond...
2. You are considering purchasing a 10 year bond with a face value of $1000 with an annual coupon of $55.00. The current interest rate is 6%, what would you expect to pay for the bond? 3. What is the current yield on a 1 year bond $100 coupon bond which you pay $98.00 for with an annual coupon payment of $6.00. 4. Assuming the same coupon payment as listed in question 3 but now the price you pay for...
1-(a) Consider a bond with a $1,000 face value and a 10 percent coupon rate with semiannual payments matures in 15 years. Determine the value of the bond to a friend of yours with a required rate of return of 13% (2 points) 1-(b) A zero coupon bond with a risk similar to part (a), is $1,000 and matures in 15 years. Your friend asks you which bond she should invest in, the zero coupon selling for $120. The bond...
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