7-33: Marty bought a 6.75%, $10000 20-year bond for $7500 with 18 years maturity. The interest...
7-33: Marty bought a 6.75%, $10000 20-year bond for $7500 with 18 years maturity. The interest was payable quarterly and was based on the $10000. The bond was kept for only 12 years and sold for $8750 immediately after the 48th interest payment was received.
(a) What is the nominal rate of return per year were made on this investment? Answer: <7 pts> Reasoning/Work:
(b) What is the effective rate of return per year were made on this investment? Answer: <3 pts> Reasoning/Work:
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7-33: Marty bought a 6.75%, $10000 20-year bond for $7500 with
18 years maturity. The interest...
A savvy investor paid $5,000 for a 20-year $10,000 mortgage bond that had a bond interest...
A savvy investor paid $5,000 for a 20-year $10,000 mortgage bond that had a bond interest rate of 10% per year, payable quarterly. Three years after he purchased the bond, market interest rates went down, so the bond increased in value. If the investor sold the bond for $13,000 three years after he bought it, what rate of return did the investor make per quarter and per year (nominal)? The rate of return per quarter is D % The rate...
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 7%...
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 7% per year payable quarterly. Leann owned the bond for 3 years. The 1st interest payment she received was 3 months after she bought the bond. She sold it immediately after receiving her 12th interest payment. Leann’s yield on the bond was 15% per year compounded quarterly. Determine the price she paid when she purchased the bond.
5. A 20-year bond with $1,000 face amount and 7% annual coupons was issued twenty years...
5. A 20-year bond with $1,000 face amount and 7% annual coupons was issued twenty years ago. You bought the bond six years ago, immediately after a coupon was paid, when the market interest rate on such bonds was 6%, and you sold it two years ago, immediately after a coupon was paid, when the market interest rate was 5%. What rate of return did you earn over the period when you held the bond? (Hint: You must figure out...
4. Calculating Returns (L01) Suppose you bought a 7 percent coupon bond one year ago for...
4. Calculating Returns (L01) Suppose you bought a 7 percent coupon bond one year ago for $970. The bond sells for $940 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?
Find the interest rate for a $7500 deposit accumulating to $12,042, compounded annually for 8 years....
Find the interest rate for a $7500 deposit accumulating to $12,042, compounded annually for 8 years. The interest rate is %. (Do not round until the final answer. Then round to two decimal places as needed.) Find the face value of the zero-coupon bond. 17-year bond at 5.4%; price $6000 The face value will be $ (Do not round until the final answer. Then round to the nearest dollar as needed.) Find the face value of the zero-coupon bond. 20-year...
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 5%...
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 5% per year payable quarterly. Leann owned the bond for 3 years. The 1st interest payment she received was 3 months after she bought the bond. She sold it immediately after receiving her 12th interest payment. Leann's yield on the bond was 15% per year compounded quarterly. Determine the price she paid when she purchased the bond. $
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 5.5%...
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 5.5% per year payable quarterly. Leann owned the bond for 3 years. The 1st interest payment she received was 3 months after she bought the bond. She sold it immediately after receiving her 12th interest payment. Leann’s yield on the bond was 10.5% per year compounded quarterly. Determine the price she paid when she purchased the bond.
A $10,000 mortgage bond with a bond Interest rate of 18% per year, payable quarterly, was...
A $10,000 mortgage bond with a bond Interest rate of 18% per year, payable quarterly, was purchased for SABO. The bond was kept until it was due total of 5 years. What is correct equation (PWPWd-) to calculate the rate of return "1" made by the purchaser of the bond? -10,000+ 900(P/A, 1.20) + 10,000/P/F, ".201-0 -8,800 900(P/A 1,10) +10,000/P/F, 1", 10)-0 -8.800 +1800(P/A, 14.5) +10,000{P/F, 1.51-0 -5,800 +450{P/A. 1.20) +10.000{P/F, 11.201-0 ROR Analysis _Single Project Select the "best answer...
33 Suppose you bought a bond with an annual coupon rate of 79 percent one year...
33 Suppose you bought a bond with an annual coupon rate of 79 percent one year ago for $902. The bond sells for $936 today a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What was your total nominal rate of return on this investment over the past year? (Do not round intermediate...
9. You are offered an investment with a quoted annual interest rate of 6.75% with quarterly...
9. You are offered an investment with a quoted annual interest rate of 6.75% with quarterly compounding of interest. What is your effective annual interest rate? 10. You are offered an annuity that will pay $15,000 per year for 20 years (the first payment will occur one year from today). If you feel that the appropriate discount rate is 3%, what is the annuity worth to you today? 11. If you deposit $6,500 per year (each deposit is made at...
A savvy investor paid $5,000 for a 20-year $10,000 mortgage bond that had a bond interest rate of 10% per year, payable quarterly. Three years after he purchased the bond, market interest rates went down, so the bond increased in value. If the investor sold the bond for $13,000 three years after he bought it, what rate of return did the investor make per quarter and per year (nominal)? The rate of return per quarter is D % The rate...
5. A 20-year bond with $1,000 face amount and 7% annual coupons was issued twenty years ago. You bought the bond six years ago, immediately after a coupon was paid, when the market interest rate on such bonds was 6%, and you sold it two years ago, immediately after a coupon was paid, when the market interest rate was 5%. What rate of return did you earn over the period when you held the bond? (Hint: You must figure out...
4. Calculating Returns (L01) Suppose you bought a 7 percent coupon bond one year ago for $970. The bond sells for $940 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? c. If the inflation rate last year was 3 percent, what was your total real rate of return on this investment?
Find the interest rate for a $7500 deposit accumulating to $12,042, compounded annually for 8 years. The interest rate is %. (Do not round until the final answer. Then round to two decimal places as needed.) Find the face value of the zero-coupon bond. 17-year bond at 5.4%; price $6000 The face value will be $ (Do not round until the final answer. Then round to the nearest dollar as needed.) Find the face value of the zero-coupon bond. 20-year...
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 5% per year payable quarterly. Leann owned the bond for 3 years. The 1st interest payment she received was 3 months after she bought the bond. She sold it immediately after receiving her 12th interest payment. Leann's yield on the bond was 15% per year compounded quarterly. Determine the price she paid when she purchased the bond. $
A $10,000 mortgage bond with a bond Interest rate of 18% per year, payable quarterly, was purchased for SABO. The bond was kept until it was due total of 5 years. What is correct equation (PWPWd-) to calculate the rate of return "1" made by the purchaser of the bond? -10,000+ 900(P/A, 1.20) + 10,000/P/F, ".201-0 -8,800 900(P/A 1,10) +10,000/P/F, 1", 10)-0 -8.800 +1800(P/A, 14.5) +10,000{P/F, 1.51-0 -5,800 +450{P/A. 1.20) +10.000{P/F, 11.201-0 ROR Analysis _Single Project Select the "best answer...
33 Suppose you bought a bond with an annual coupon rate of 79 percent one year ago for $902. The bond sells for $936 today a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What was your total nominal rate of return on this investment over the past year? (Do not round intermediate...
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