You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of i=16.5% compounded once per year. 25 years later it will be a 5 year zero coupon bond. Suppose the interest rate on this bond will be 16.5%, what will the price of this bond be in 25 years?
You buy a 30 year zero coupon bond which will pay you $1000 in 30 years...
4. (Zero Coupon Bonds) A zero coupon bond is a debt security that does not pay interest but trades at a discount, and will pay its face value at maturity. Suppose a zero coupon bond matures to a value of $1000 in eight years. If the bond is yielding at 4% per annum, what is the purchase price of the bond? Suppose a 8-year coupon-paying bond is paying $40 a year, and has a face value of $1000 is selling...
You purchase a 30-year, zero-coupon bond for a price of $35. The bond will pay back $100 after 30 years and make no interim payments. The annual compounded return (geometric average return) on this investment is: OA. 3.0396 OB. 356% OC. 427% OD, 3.38%
1. If you buy a semi-annually compounded 5-year corporate coupon bond with a face value of $1000, coupon rate of 4%, and yield to maturity of 6%, then you know that a)the fair price of the bond is less than $1000. b)the coupon amount is $30. c)both a) and b) are correct. d)neither a) nor b) is correct. 2. Assuming 365 days in a year, if the annual interest rate is 10%, what is the present value of a $100...
You buy a 5-year zero coupon bond with 4% yield to maturity. You sell the bond 2 years later when it's yield to maturity is 2%. What was your annualized holding period return?
Please Solve Question 6 1 pts You buy a 5% coupon bond for $1000 and sell it for $1,200 after a year. Your rate of return is _ _%. Question 7 1 pts If a security you can buy today for $200 pays $110 next year and $121 the year after that. Its yield to maturity is __ _%. Question 8 1 pts If a perpetuity has a price of $500 and an annual interest payment of $25, the interest...
6. Suppose that you purchase a 2 year coupon bond at the time it is issued for $1100. The face value of the bond is $1000, with annual coupon payments of $80. a. What is the bond's "coupon rate"? b. What is the bond's "current yield"? C. What is the bond's (nominal) "yield to maturity"? d. If you hold the bond for 1 year and sell it for $1035 (after collecting the first coupon payment), what is your "holding period...
3) A 10 year zero coupon bond maturing at $1000 is callable at the 7 year point for $900. a) What price should an investor pay if they want a (annual effective) yield of at least 5%? b) What will their yield be if the bond is called early?
3) A 10 year zero coupon bond maturing at $1000 is callable at the 7 year point for $900. a) What price should an investor pay if they want a (annual effective) yield of at least 5%? b) What will their yield be if the bond is called early?
Zero-coupon bonds: a. A ten-year, zero coupon bond trades at a Yield-to-Maturity (YTM) of 3.5%. Assume you buy $1000 worth of the bond today. How much will it be worth 10 years from now at maturity? b. A 5-year, zero coupon bond trades at a Yield-to-Maturity (YTM) of 2.5%. Assume you buy $1000 worth of the bond today. How much will it be worth 5 years from now at maturity? C. Assume you invest $1,131.41 today and receive $1,410.60 five...
1. What is a bond? 2. Does a zero-coupon bond pay interest? Explain your answer. 3. Endicott Enterprises Inc. has issued thirty-year semiannual coupon bonds with a face value of $1,000. If the annual coupon rate is 14% and the current yield to maturity is 8%, what is the firm’s current price per bond? 4. Delagold Corporation is issuing a zero-coupon bond that will have a maturity of fifty years. The bond’s par value is $1,000, and the current yield...