1. You purchased a 6.25% bond 4 years ago at par. The bond matures 26 years from now and pays interest at the end of each 6 months. Similar bonds are being issued that pay 8.5% interest. What is your $1,000 bond worth today?
2. Rob Morrisey purchased a $1,000 bond that was quoted at 102.25 and paying 8 7/8% interest. How much did Rob pay for the bond? How much annual interest will be received?
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1. You purchased a 6.25% bond 4 years ago at par. The bond matures 26 years...
Six years ago, you purchased a callable bond with fifteen years until maturity. The bond has a $1,000 par value and pays interest semiannually. The bond has 9% coupon rate and a 6% yield to maturity. The bond offers three years of call protection and a 2% call premium. a. How much did you pay for the bond at the time of purchase? b. Today, the firm called the bond. What is the bond’s yield to call? c. Did the...
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