You own a bond that pays $ 80 in annual interest, with a $1000 par value....
- You own a bond that pays $ 80 in annual interest, with a $1000 par value. It matures in 20 years. The market required yield to maturity on a comparable-risk bond is 10%
- Calculate value of the bond
- How does the value change if the yield to maturity on comparable-risk bond
- Increase 17% or
- Decrease to 6%
- Explain the implications of your answers in part b as they relate to interest rate risk, premium bonds, and discount bonds
- Assume that the bond matures in 5 years instead of 20 years , and recalculate your answers in part b
- Explain the implications of your answers in part d as they relate to interest-rate risk, premium bonds and discount bonds
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You own a bond that pays $ 80 in annual interest, with a $1000
par value....
You own a bond that pays $110 in annual interest, with a $1,000 par value. It...
You own a bond that pays $110 in annual interest, with a $1,000 par value. It matures in 10 years. Your required rate of return is 12 percent. a. Calculate the value of the bond. b. How does the value change if your required rate of return (1) increases to 14 percent or (2) decreases to77 percent? c. Explain the implications of your answers in part (b) as they relate to interest rate risk, premium bonds, and discount bonds. d....
(Related to Checkpoint 9.3) (Bond valuation relationships) You own a bond that pays $100 in annual...
(Related to Checkpoint 9.3) (Bond valuation relationships) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 15 years. The market's required yield to maturity on a comparable-risk bond is 12 percent. a. Calculate the value of the bond. b. How does the value change if the yield to maturity on a comparable-risk bond (i) increases to 15 percent or (ii) decreases to 8 percent? c. Explain the implications of your answers...
(Bond valuation) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 20 years....
(Bond valuation) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 20 years. Your required rate of return is 12 percent aleos Edg a. Calculate the value of the bond. b. How does the value change if your required rate of return (1) increases to 15 percent or (2) decreases to 7 percent? c. Explain the implications of your answers in part (b) as they relate to interest rate risk, premium...
a. Calculate the value of the bond. 1. How does the value change if the market's...
a. Calculate the value of the bond.
1. How does the value change if the market's required yield to
maturity on a comparable-risk bond (i) increases to 11 percent
or (ii) decreases to 6 percent?
2. Explain the implications of your answers in part b as they
relate to interest-rate risk, premium bonds, and discount
bonds.
3. Assume that the bond matures in15 years instead of 20 years.
Recompute your answers in parts a and b.
4. Explain the implications...
a,b,c,d,e (Bond valuation) You own a bond that pays $100 in annual interest, with a $1,000...
a,b,c,d,e
(Bond valuation) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 15 years. Your required rate of return is 11 percent a. Calculate the value of the bond. b. How does the value change if your required rate of return (1) increases to 15 percent or (2) decreases to 7 percent? c. Explain the implications of your answers in part (b) as they relate to interest rate risk, premium bonds,...
Question 5: (15 points). (Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70...
Question 5: (15 points). (Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70 in interest, with a $1,000 par value and matures in 25 years. The markers required yield to maturity on a comparable-risk bond is 8 percent. (Round to the nearest cent.) For questions with two answer options (e.g. increase/decrease) choose the best answer and write it in the answer block. a. What is the value of the bond if the markers required yield to maturity...
(1) (Bond Valuation) a bond that matures in 9 years has a $1000 par value. the...
(1) (Bond Valuation) a bond that matures in 9 years has a $1000 par value. the annual coupon interest rate is 14% and the markets required yield to maturity on a comparable risk-bond is 16%. what would be the value of this bond if it paid interest annually? what would be the vale of this bond if it paid interest semi-annually? (2) (yield to maturity) the market price is $850 for a 12-year bond ($1000 par value) that pays 9%...
Question 5: (15 points). (Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70...
Question 5: (15 points). (Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70 in interest, with a $1,000 par value and matures in 25 years. The markers required yield to maturity on a comparable-risk bond is 8 percent. (Round to the nearest cent.) For questions with two answer options (e.g. increase/decrease) choose the best answer and write it in the answer block. Question a. What is the value of the bond if the markers required yield to...
A bond that matures in 15 years has a $1000 par value. The annual coupon interest...
A bond that matures in 15 years has a $1000 par value. The annual coupon interest rate is 8 percent and the market's required yield to maturity on a comparable-risk bond is 15 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually?
A bond that matures in 17 years has a $1000 par value. The annual coupon interest...
A bond that matures in 17 years has a $1000 par value. The annual coupon interest rate is 15 percent and the market's required yield to maturity on a comparable-risk bond is 14 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually? Question 7-3
(Related to Checkpoint 9.3) (Bond valuation relationships) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 15 years. The market's required yield to maturity on a comparable-risk bond is 12 percent. a. Calculate the value of the bond. b. How does the value change if the yield to maturity on a comparable-risk bond (i) increases to 15 percent or (ii) decreases to 8 percent? c. Explain the implications of your answers...
(Bond valuation) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 20 years. Your required rate of return is 12 percent aleos Edg a. Calculate the value of the bond. b. How does the value change if your required rate of return (1) increases to 15 percent or (2) decreases to 7 percent? c. Explain the implications of your answers in part (b) as they relate to interest rate risk, premium...
a. Calculate the value of the bond.
1. How does the value change if the market's required yield to
maturity on a comparable-risk bond (i) increases to 11 percent
or (ii) decreases to 6 percent?
2. Explain the implications of your answers in part b as they
relate to interest-rate risk, premium bonds, and discount
bonds.
3. Assume that the bond matures in15 years instead of 20 years.
Recompute your answers in parts a and b.
4. Explain the implications...
a,b,c,d,e
(Bond valuation) You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 15 years. Your required rate of return is 11 percent a. Calculate the value of the bond. b. How does the value change if your required rate of return (1) increases to 15 percent or (2) decreases to 7 percent? c. Explain the implications of your answers in part (b) as they relate to interest rate risk, premium bonds,...
Question 5: (15 points). (Bond valuation relationships) Arizona Public Utilities issued a bond that pays $70 in interest, with a $1,000 par value and matures in 25 years. The markers required yield to maturity on a comparable-risk bond is 8 percent. (Round to the nearest cent.) For questions with two answer options (e.g. increase/decrease) choose the best answer and write it in the answer block. Question a. What is the value of the bond if the markers required yield to...
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