Homework Answers
| Correct answer is: The bond's expected capital gains yield is zero |
|
Bond par value = Sale value of the bond Therefore, when selling bonds at par value there is no capital gain yield on sale of bonds |
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Question 26 5.5 pts A 10-year corporate bond has an annual coupon of 9%. The bond...
A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at...
A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is CORRECT? The bond's current yield is above 9%. The bond's yield to maturity is above 9%. If the bond's yield to maturity declines, the bond will sell at a discount. The bond's expected capital gains yield is zero.
A 10-year bond with a 9% annual coupon has a yield to maturity of 8%. Which...
A 10-year bond with a 9% annual coupon has a yield to maturity of 8%. Which of the following statements is CORRECT? The bond is selling below its par value. The bond is selling at a premium. The bond's current yield is greater than 9%. The bond is selling at a discount. If the yield to maturity remains constant, the bond's price one year from now will be higher than its current price.
Question 27 1 pts A 12-year bond has an annual coupon of 9%. The coupon rate...
Question 27 1 pts A 12-year bond has an annual coupon of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? O If market interest rates decline, the price of the bond will O The bond is currently selling at a price below its par O If market interest rates remain unchanged, the bond's also decline. value. price one year from now...
Analyze the 20-year, 8% coupon rate (annual payment), $1,000 par value bond. The bond currently sells...
Analyze the 20-year, 8% coupon rate (annual payment), $1,000 par value bond. The bond currently sells for $1,318. What's the bond's yield to maturity? o o 5.36% 5.68% o 6.75% o 7.85% A 10-year corporate bond has an annual coupon payment of 8%. The bond is currently selling at par ($1.000). Which of the following statement is NOT correct? The bond's yield to maturity is 8%. The bond's current yield is 8%. If the bond's yield to maturity remains constant,...
You just purchased 10 year corporate and that has an annual coupon The band sell or...
You just purchased 10 year corporate and that has an annual coupon The band sell or a premium above par. Which of the following statements correct? a. The bond's yield to maturity is less than 10 percent. . The band's current yield is greater than 10 percent or the bond's yield to maturity stays constant, the bond's price will be the same on year from now d. Statements a and care correct. e. None of the answers above is correct....
1a) You just learned from your sister that you can buy a $1,000 par value bond...
1a) You just learned from your sister that you can buy a $1,000 par value bond for $800. The coupon rate is ten percent (paid annually), and there are ten years left until the bond matures. You should purchase the bond if your require twelve percent return on bonds with this similar risk level. True/False? 1b) A corporate bond with ten years to maturity has an annual coupon rate of six percent. The bond today is selling for $1,000. With...
A.Zero Coupon Bonds A 7 year maturity zero coupon corporate bond has an 8% promised yield....
A.Zero Coupon Bonds A 7 year maturity zero coupon corporate bond has an 8% promised yield. The bond's price should equal B.The Fishing Pier has 6.40 percent, semi-annual bonds outstanding that mature in 12 years. The bonds have a face value of $1,000 and a market value of $1,027. What is the yield to maturity? C.Bond Yields Find the promised yield to maturity for a 7% coupon, $1,000 par 20 year bond selling at $1115.00. The bond makes semiannual coupon...
5. A corporate bond matures in 10 years. The bond has an 8 percent semiannual coupon...
5. A corporate bond matures in 10 years. The bond has an 8 percent semiannual coupon and a par value of $1,000. The bond is callable in five years at a call price.of S1.050. The price or the bond today is $1,075 A. (8 pts) What is the bond's nominal yield to maturity? B. (8 pts)What is the bond's nominal yield to call? C. (2pts) If you bought this bond, which return do vou think you would actually earn? D....
Suppose you purchase a 30-year zero-coupon bond with a yield to maturity of 5.5 % You...
Suppose you purchase a 30-year zero-coupon bond with a yield to maturity of 5.5 % You hold the bond for five years before selling it.a. If the bond's yield to maturity is 5.5 % when you sell it, what is the rate of return of your investment? b. If the bond's yield to maturity is 6.5 % when you sell it, what is the rate of return of your investment? c. If the bond's yield to maturity is 4.5 %...
Last year Carson Industries issued a 10-year, 14% semiannual coupon bond at its par value of...
Last year Carson Industries issued a 10-year, 14% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,300. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % Would an...
A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is CORRECT? The bond's current yield is above 9%. The bond's yield to maturity is above 9%. If the bond's yield to maturity declines, the bond will sell at a discount. The bond's expected capital gains yield is zero.
A 10-year bond with a 9% annual coupon has a yield to maturity of 8%. Which of the following statements is CORRECT? The bond is selling below its par value. The bond is selling at a premium. The bond's current yield is greater than 9%. The bond is selling at a discount. If the yield to maturity remains constant, the bond's price one year from now will be higher than its current price.
Question 27 1 pts A 12-year bond has an annual coupon of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? O If market interest rates decline, the price of the bond will O The bond is currently selling at a price below its par O If market interest rates remain unchanged, the bond's also decline. value. price one year from now...
Analyze the 20-year, 8% coupon rate (annual payment), $1,000 par value bond. The bond currently sells for $1,318. What's the bond's yield to maturity? o o 5.36% 5.68% o 6.75% o 7.85% A 10-year corporate bond has an annual coupon payment of 8%. The bond is currently selling at par ($1.000). Which of the following statement is NOT correct? The bond's yield to maturity is 8%. The bond's current yield is 8%. If the bond's yield to maturity remains constant,...
You just purchased 10 year corporate and that has an annual coupon The band sell or a premium above par. Which of the following statements correct? a. The bond's yield to maturity is less than 10 percent. . The band's current yield is greater than 10 percent or the bond's yield to maturity stays constant, the bond's price will be the same on year from now d. Statements a and care correct. e. None of the answers above is correct....
5. A corporate bond matures in 10 years. The bond has an 8 percent semiannual coupon and a par value of $1,000. The bond is callable in five years at a call price.of S1.050. The price or the bond today is $1,075 A. (8 pts) What is the bond's nominal yield to maturity? B. (8 pts)What is the bond's nominal yield to call? C. (2pts) If you bought this bond, which return do vou think you would actually earn? D....
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