ZuoTi.Pro
Question

John wanted to invest in Segambut bopds, however, he is still new in the industry. Currently,...

John wanted to invest in Segambut bopds, however, he is still new in the industry. Currently, Segambut bond is selling ak RM874 with the current par value of RM1,000 bond, with the coupon rate at 5% semi-annualy with year to go before maturity He was also thinking to buy a new issle Kiara bonds currently selling at par value of RM1,000 with coupon payment of 12% a year with 7-year maturity Recommend to John which bond is the better option for him to buy, given both of them carry the same risk profile. (5 marks)
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Segambut bond Po=874, par value = 1000 , Semiannual coupon = 5 of 1000 = 250 Yield y (cet) i 874= 25% + 25 +1000 Solving usin

Please Please do rate me and mention doubts in the comments section.

0 0
Add a comment
Know the answer?
Add Answer to:
John wanted to invest in Segambut bopds, however, he is still new in the industry. Currently,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 12，13，14 are one question it? take duvantage of this opportunity, you need to invest $14,000 Up...

    12，13，14 are one question it? take duvantage of this opportunity, you need to invest $14,000 Up front. Assuming you require a 12% annual return for this type of le a 12% annual return for this type of investment, should you do What is the most you should be willing to pay for this inves, X 5000 12. A 15 year bond currently sells at par. It offers semi-annual payme u currently sells at par. It offers semi-annual payments and the...

  • Five Star Co. wants to issue new 20-year bonds for an expansion project. The company currently...

    Five Star Co. wants to issue new 20-year bonds for an expansion project. The company currently has 5% (annual coupon rate) coupon bonds on the market. This existing bond was issued 5 years ago and the original term to maturity was 25 years. Currently, this bond is selling at par and makes semiannual payments. The par value of bonds is $1,000. If the company wants to sell its new bonds for 120% of the par value, what should the coupon...

  • need answers for 13 and 14 Question 13 (4 points) XZYY, Inc. currently has an issue...

    need answers for 13 and 14 Question 13 (4 points) XZYY, Inc. currently has an issue of bonds outstanding that will mature in 24 years. The bonds have a face value of $1,000 and a stated annual coupon rate of 15% with semi-annual coupon payments. The bond is currently selling for $856. The bonds may be called in 3 years for 117% of par value. What is the quoted annual yield-to- maturity for these bonds? 26.30% 8.79% 19.25% 17.58% 34.44%...

  • Derek decides to buy a new car. The dealership offers him a choice of paying $524.00...

    Derek decides to buy a new car. The dealership offers him a choice of paying $524.00 per month for 5 years (with the first payment due next month) or paying some $28,939.00 today. He can borrow money from his bank to buy the car. What interest rate makes him indifferent between the two options? Submit Answer format: Percentage Round to: 3 decimal places (Example: 9.243%, % sign required. Will accept decimal format rounded to 5 decimal places (ex: 0.09243)) Assume...

  • need help with question 14 and 15 Question 14 (4 points) XZYY, Inc. currently has an...

    need help with question 14 and 15 Question 14 (4 points) XZYY, Inc. currently has an issue of bonds outstanding that will mature in 17 years. The bonds have a face value of $1,000 and a stated annual coupon rate of 14% with annual coupon payments. The bond is currently selling for $1167. The bonds may be called in 3 years for 116% of par value. What is your expected quoted annual rate of return if you buy the bonds...

  • 1) Yield to maturity: Rudy Sandberg wants to invest in four-year bonds that are currently priced...

    1) Yield to maturity: Rudy Sandberg wants to invest in four-year bonds that are currently priced at $868.43. These bonds have a coupon rate of 6 percent and pay semiannual coupon payments. What is the current market yield on this bond? 2) Realized yield: Josh Kavern bought ten-year, 12 percent coupon bonds issued by the U.S. Treasury three years ago at $913.44. If he sells these bonds, which have a face value of $1,000, at the current price of $804.59,...

  • 7. Ali buys a new car and finances it with a loan of 22,000. He will...

    7. Ali buys a new car and finances it with a loan of 22,000. He will make n monthly payments of 450.30 starting in one month. He will make one larger payment in n + 1 months to pay off the loan. Payments are calculated using an annual nominal interest rate of 8.4%, convertible monthly. Immediately after the 18th payment he refinances the loan to pay off the remaining balance with 24 monthly payments starting one month later. This refinanced...

  • Two years ago bonds were issued which currently still have 10 years until maturity. When issued...

    Two years ago bonds were issued which currently still have 10 years until maturity. When issued the bonds were selling at par, and had a 4% coupon (paid annually). If interest rates for that grade of bond are currently 4.25%, what will be the market price of these bonds? Calculate to 2 decimals. (Don't forget US bonds typically have a face value of $1,000). In the USA coupon payments are typically made twice a year. calculate the price of these...

  • 7. Your grandfather left an inheritance for you of $80,000. However you can only drawdown on...

    7. Your grandfather left an inheritance for you of $80,000. However you can only drawdown on the investment as follows: Years 1 – 4 $10,000 each year and Year 5 $40,000 Interest on the fund is 7.5%. What is the present worth of this inheritance? 10. The face value for Karen’s Limited bonds is $100,000 and has a 2 percent annual coupon. The 2 percent annual coupon bonds matures in 2022, and it is now 2012. Interest on these bonds...

  • John and Joseph are vice presidents of Copperbelt Money Management (CMM) and co-directors of the company's...

    John and Joseph are vice presidents of Copperbelt Money Management (CMM) and co-directors of the company's pension fund management division. A major new client, the Nkana League of Cities, has requested that CMM present an investment seminar to the mayors of the represented cities. John and Joseph, who will make the presentation, have asked you to help them by answering the following questions. a) What are a bond's key features? (4 Marks) b) How is the values of any asset...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT