Homework Answers
1. Option b is correct option.Lowest price at which a dealer
will sell a t-bond.
2. After tax yield =YTM*(1-Tax Rate) =8.2%*(1-28%) =5.90% (Option a
is correct option)
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The "ask" price in the dealer market for Treasury Bonds is the: lowest price for which...
1. A $1,000 Treasury note has 4.5 years left to maturity, a yield to maturity of...
1. A $1,000 Treasury note has 4.5 years left to maturity, a yield to maturity of 4.25 percent, and a coupon rate of 4.50 percent. What is the price of the bond? Group of answer choices $1,007.83 $1,010.14 $1,008.53 $1,011.96 $1,009.56 2. A corporate bond is yielding 7.31 percent and a municipal bond is yielding 4.75 percent. What is the critical marginal tax rate? 3. You own a principal STRIPS which is based on a 4.5 percent coupon Treasury bond...
For Stock A, which is traded in a dealer market, the bid-ask spread is 1 dollar....
For Stock A, which is traded in a dealer market, the bid-ask spread is 1 dollar. A buy-market order is executed at 60 dollars. A. Will a limit-sell order of 60.5 be executed? If so, in what price? B. Will a limit-buy order of 59.5 be execeuted? If so, in what price? C. Will a market-sell order be executed? If so, in what price?
IGEN WUN A bank is considering two securities: a 30-year Treasury bond yielding 8 percent and...
IGEN WUN A bank is considering two securities: a 30-year Treasury bond yielding 8 percent and a 30-year municipal bond yielding 3 percent. a. If the bank's tax rate is 35 percent, calculate the Treasury bond's tax equivalent yield. (Round your answer to 1 decimal place. (e.g., 32.1)) b. Which bond offers the higher tax equivalent yield? 1.0: % a. b. Tax equivalent yield Tax equivalent yield 30-year treasury bond
Dana intends to invest $46,000 in either a Treasury bond or a corporate bond. The Treasury...
Dana intends to invest $46,000 in either a Treasury bond or a corporate bond. The Treasury bond yields 5 percent before tax and the corporate bond yields 6 percent before tax. a-1. Assuming Dana’s federal marginal rate is 24 percent and her marginal state rate is 5 percent, which of the two options should she choose? Assume that Dana itemizes deductions. Corporate bond Treasury bond a-2. How much interest after-tax would Dana earn by investing in the corporate bond? (Do...
10. A dealer formation, at what price is a dealer willing to sell this T-bill quotes 90-day T-Bill with a face value of $1,000 at 4.80% bid and 4.10% ask Given this in- 11. investor purchased a T...
10. A dealer formation, at what price is a dealer willing to sell this T-bill quotes 90-day T-Bill with a face value of $1,000 at 4.80% bid and 4.10% ask Given this in- 11. investor purchased a TIPS with face value of Si ,00,00 and a 2% perce iannually). What will the second coupon payment if the semiannual inflation during the first six months was 2.8% while the semiannual inflation over the second six months was 22%? nt annual coupon...
You can invest in taxable bonds that are paying a yield of 8.2 percent or a...
You can invest in taxable bonds that are paying a yield of 8.2 percent or a municipal bond paying a yield of 6.75 percent. Assume your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16) b. Which security bond should you buy? Rate of return b. The security bond one should buy is es
A Treasury bond with the longest maturity (30 years) has an ask price quoted at 107.4375....
A Treasury bond with the longest maturity (30 years) has an ask price quoted at 107.4375. The coupon rate is 3.00 percent, paid semiannually. What is the yield to maturity of this bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
A Treasury bond with the longest maturity (30 years) has an ask price quoted at 102.9375....
A Treasury bond with the longest maturity (30 years) has an ask price quoted at 102.9375. The coupon rate is 3.90 percent, paid semiannually. What is the yield to maturity of this bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Investments Treasury bonds pricing quotations reveal an ask price of 104.75 and a bid price of...
Investments Treasury bonds pricing quotations reveal an ask price of 104.75 and a bid price of 104.150. As a seller of the bond, what is the dollar price you expect to receive? $1,048.00 $1,042.50 $1,041.50 $1,041.75 $1,040.40 Cynthia Stephen’s portfolio consists of 30% common stocks, 40% bonds, 15% foreign securities and 15% short-term securities. This asset allocation would be considered to be: aggressive. moderate conservative passive. The exchange is found to be paying a 1% real rate of return. Inflation...
Which security should sell at a greater price? a. A 5-year Treasury bond with a 7.00%...
Which security should sell at a greater price? a. A 5-year Treasury bond with a 7.00% coupon rate versus a 5-year Treasury bond with a 3.00% coupon. b. A 10-year Treasury bond with a 5% coupon bond versus a 20-year Treasury bond with a 5% coupon. c. A 10-year Treasury bond with a 5% coupon bond versus a 10-year BBB corporate bond with a 5% coupon.
For Stock A, which is traded in a dealer market, the bid-ask spread is 1 dollar. A buy-market order is executed at 60 dollars. A. Will a limit-sell order of 60.5 be executed? If so, in what price? B. Will a limit-buy order of 59.5 be execeuted? If so, in what price? C. Will a market-sell order be executed? If so, in what price?
IGEN WUN A bank is considering two securities: a 30-year Treasury bond yielding 8 percent and a 30-year municipal bond yielding 3 percent. a. If the bank's tax rate is 35 percent, calculate the Treasury bond's tax equivalent yield. (Round your answer to 1 decimal place. (e.g., 32.1)) b. Which bond offers the higher tax equivalent yield? 1.0: % a. b. Tax equivalent yield Tax equivalent yield 30-year treasury bond
10. A dealer formation, at what price is a dealer willing to sell this T-bill quotes 90-day T-Bill with a face value of $1,000 at 4.80% bid and 4.10% ask Given this in- 11. investor purchased a TIPS with face value of Si ,00,00 and a 2% perce iannually). What will the second coupon payment if the semiannual inflation during the first six months was 2.8% while the semiannual inflation over the second six months was 22%? nt annual coupon...
You can invest in taxable bonds that are paying a yield of 8.2 percent or a municipal bond paying a yield of 6.75 percent. Assume your marginal tax rate is 21 percent. a. Calculate the after-tax rate of return on the taxable bond? (Round your answer to 2 decimal places. (e.g., 32.16) b. Which security bond should you buy? Rate of return b. The security bond one should buy is es
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