Homework Answers
OPTION A---$901
Calculation of current market value of bond
Interest payment = 40 * PVA(n=14, i=5%) =40*9.903=396
Add- Face value =1000 * PV(n=14, i=5%) =1000*.505 =505
Total current market value =$901
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An investor purchases a 7-year, $1,000 par value bond that pays semianual interest of $40. If...
An investor purchases a 7-year, $1,000 par value bond that pays
semianual interest of $40. If the semianual market rate of interest
is 5%, what is the current market value of the bond?
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An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice Ο $1000. Ο Ο Ο $881.
An investor purchases a 10-year , $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Multiple Choice $828 $878 $1,000 О O $1,516
An investor purchases a 9-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 5%, what is the current market value of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Ο $969. Ο $1,000. Ο $931. Ο $1,621.
An investor purchases a 7-year, $1,000 par value bond that pays
semianual interest of $40. If the semianual market rate of interest
is 5%, what is the current market value of the bond?
15 current market value of the bone ASLASSEYASIDSLESVOS provided) $901 $944 $1000
Sand Explorers issues bonds due in 10 years with a stated interest rate of 6% and a face value of $210,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. Using present value tables, calculate the issue price of the bonds. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $177,569. $226,369. Loooo $264,081. $210,000.
Mind Explorers issues bonds with a stated interest rate of 8%, face value of $180,000, and due in 10 years. Interest payments are made semi- annually. The market rate for this type of bond is 7%. Using present value tables, calculate the issue price of the bonds. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $192,792. $180,000 oooo $146,426. $167,769.
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