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Question: Suppose that you have a four-year bond which has a 2 percent coupon rate, has a $100 face value, and pays annual coupons. Market yields for this type of bond are 4 percent. What is the modified duration of this bond?
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Can someone please help with this question? Question: Suppose that you have a four-year bond which...
Suppose you purchase a ten-year bond with 6 percent annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.5% when you purchased and 7% when you sold the bond. What is your annual rate of return on the bond in each of the following situations: a) All coupons were immediately spent when received. b) All coupons were reinvested in a bank account, which pays...
(1 point) A 10 year $11 000 par-valued bond pays monthly coupons. If the yield rate is y 12-9% and the purchase price is $7381.84, what is the coupon rate c12? Answer: (1 point) Two bonds, each with a face value of $13000, are redeemable at par in t-years and priced to yield y4-8%. Bond 1 of P? has a coupon rate c4-11.8% and sells for $15628.24. Bond 2 has coupon rate c-5% and sells for S R What is...
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Question 9 Southern Island's bonds have a face value of $1,000, pay coupon annually with an annual coupon of $70 and mature in 15 years. What is the current price of the bond if the yield to maturity is 6.2 percent? Question 10 Trading Game Incorporated has $1,000 face value bonds outstanding with a market price of $1,082.27. The bonds pay coupon semi-annually, mature in 10 years, and have a yield to...
Question 12 6 pts Consider a 4-year bond with a face value of 100 USD/bond that pays coupons every six months. It has a yield to maturity of 3.0225% and an annual coupon rate of 3.0000%. What is the bond's price if there are no arbitrage opportunities? (Input your answer with 4 decimals) --
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From the perspective of someone holding a ten-year bond, which would have a higher net present value: a level coupon bond with a face value of $1,000 with a 2% annual coupon rate, or a zero-coupon bond with the same face value? Be sure to explain your answer, and assume coupon payments for the level coupon bond start in Year 1 (the bond is purchased in Year O).
Consider a 3-year 11% coupon bond with a face value of $100. Suppose that the yield on the bond is 12% per annum with continuous compounding. The bond pays coupon every 6 months. Use the modified duration to calculate the effect on the bond’s price for a 0.1% increase in its yield. A $90.12 B $96.42 C $94.73 D $98.32
Suppose you have purchased a 30-year, 4.99% coupon bond pays interest annually. The bond has a face value of $1,000. What is the change in the price of this bond if the market yield to maturity declines to 5.15% from the current rate of 5.90%? Please show all the calculations by which you came up with the final answer. Why did the 30-year bond price change? Please explain your reasoning.
Calculate the duration for a 2-year bond which has a 8% annual coupon rate, and coupons are paid semiannually. The yield to maturity is 6% and the face value of the bond is $1000.
Calculate the duration for a 2-year bond which has a 8% annual coupon rate, and coupons are paid semiannually. The yield to maturity is 6% and the face value of the bond is $1000.
6. (20 points) Suppose months, maturity in 12 months, and maturity in 18 months. Suppose the 6 month bond is a zero-coupon bond and has a theoretical price of $101. Suppose the 1 year bond pays a coupon every 6 months at an annual rate of $6, and has a theoretical price of $97. Suppose the 18 month bond pays a coupon every 6 months, at an annual rate of $8 and has a theoretical price of $96. The face...