You are considering buying an 8% annual pay coupon bond with a $1000 face value, and...

Question

Question

You are considering buying an 8% annual pay coupon bond with a $1000 face value, and 20 years to maturity

that cost $1200 today. You expect to sell the bond in 5 years. At that time you expect the discount rate on

similar bonds with similar risk to be 8%. If you’re correct, the yield over the 5-year period would be:

Answer 1

Similar Homework Help Questions

You are considering buying a Fagel Corp. bond with a $1000 face value, 11% semi-annual coupon...

You are considering buying a Fagel Corp. bond with a $1000 face value, 11% semi-annual coupon that has 14 years left until maturity. The bond has a yield to maturity of 16%. What is the fair price of this bond? $726.62 None of these $723.72 $1,353.04 $607.81
You are considering buying a Stragen's Corp. bond with a $1000 face value, 16% semi-annual coupon...

You are considering buying a Stragen's Corp. bond with a $1000 face value, 16% semi-annual coupon that has 14 years left until maturity. The bond has a yield to maturity of 10%. What is the fair price of this bond? $1,446.94 $1,191.85 $1,442.00 None of these $668.47
orrect Question 8 0/1 pts You are considering buying a bond with a $1000 face value....

orrect Question 8 0/1 pts You are considering buying a bond with a $1000 face value. The coupon rate is 6%, paid semi-annually. The bond will mature in 10 years. The YTM for similar bonds in the market is 8% (annually). How much will the ANNUAL interest payments be? 560 11 pts Question 9

Bond Coupon Rate Maturity Year Par Value 1 7.5% 2032 1000 2 8.25% 2029 1000 3...

Bond Coupon Rate Maturity Year Par Value 1 7.5% 2032 1000 2 8.25% 2029 1000 3 6.0% 2023 1000 a.) Assuming that bonds pay annual coupon, estimate the market value of each bond at a discount rate of 7.4% b.) Assuming that bonds pay annual coupon, what will happen to the price of each bond if market rates suddenly decrease from 7.4% to 6.2%? Which of the three bonds will have the greatest percentage change in price? c.) Assuming that...
If you pay $1200 today for a new $1000 face value two-year bond with a 8%...

If you pay $1200 today for a new $1000 face value two-year bond with a 8% coupon rate, your rate of return, or yield to maturity is 8% More than 8% Less than 8% Need more information to calculate Base on the Pure Expectations Theory of interest rates, if the one-year rate is 4%, and the one-year rate, one year from now, is expected to be 10% the current two-year rate should be 7% 3% 6% 14% If you pay...
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...

A coupon bond with a face value of $1200 that pays an annual coupon of $400...

A coupon bond with a face value of $1200 that pays an annual coupon of $400 has a coupon rate equal to ? What is the approximate (closest whole number) yield to maturity on a coupon bond that matures one year from today, has a par value of $1010, pays an annual coupon of $75, and whose price today is $1004.50? A. 7% B. 4% C. 8% D 6% E. 5% If the yield to maturity on a bond exceeds...
6. What is the value of a bond with a face value of 1000 of 16%...

6. What is the value of a bond with a face value of 1000 of 16% and has a three year maturity? that pays annual coupon with a rate a. If other bonds of similar risk and maturity have a 5% yield. b. If the opportunity cost of similar investments is 7%, 6% and 3%, respectively for 1, 2 and 3 years.
a 15 year annual coupon bond is priced at 984.56 the bond has a face value...

a 15 year annual coupon bond is priced at 984.56 the bond has a face value of 1000 and yields to maturity at 6.5% what is the coupon rate 2. the 1000 face value bonds if galaxies have a coupon rate of 5.5% and pay nterest semiannually currently the bonds are quoted 98.02 and ,store on 12 years what is the yield to maturity

1. a corperate bond matures in 3 years. the bond has an 8% semiannual coupon and...

1. a corperate bond matures in 3 years. the bond has an 8% semiannual coupon and the par value is 1000. the bond is callable in 2 years at a call price of $1050. the price of the bond today is $1075. what is the bonds yield to call? 2. midea cooperation bonds mature in 3 years and have a yield to maturity of 8.5%. the par value is 1000. the bond has a 10% coupon rate and pay interest...