Homework Answers
![if semi annual: Price of the zero coupon bond = present value of the par value of bond = $676.84 [1,000/1.0518] if YTM 12%, P](http://img.homeworklib.com/questions/bc1741a0-055f-11ea-b1b5-6b34fdba8eb8.png?x-oss-process=image/resize,w_560)
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5) Consider a 4-year, $1000 par value bond with zero coupons. If the yield to maturity is 10%, what would be the price...
Consider a 4-year, $1000 par value bond with zero coupons. If the yield to maturity is...
Consider a 4-year, $1000 par value bond with zero coupons. If the yield to maturity is 10%, what would be the price of this bond? If the yield to maturity increases to 12% how much does the bond's price change?
20) Consider a 3-year, $1000 par value bond with zero coupons. The yield to maturity today...
20) Consider a 3-year, $1000 par value bond with zero coupons. The yield to maturity today is 10%. We plan to buy this bond right now (t=0), and sell it a year later (t=1). If the yield to maturity decreases to 8% after we buy this bond, and if we wait until time t=1 to sell this bond, what would be our annualized holding period return? (rounded to 2 decimals) a) -5.36% b) 4.11% c) 5.66% d) 14.11%
(Yield to maturity) The market price is $750 for a 9-year bond ($1000 par value) that...
(Yield to maturity) The market price is $750 for a 9-year bond ($1000 par value) that pays 9 percent annual interest, but makes interest payments on a semiannual basis (4.5 percent semiannually). What is the bond's yield to maturity? The bond's yield to maturity is nothing%. (Round to two decimal places.)
What is the price of a 30 year bond with a $1000 par value? The bond...
What is the price of a 30 year bond with a $1000 par value? The bond has a 5% coupon rate, pays semi-annual coupons, and has a 8% yield to maturity. A. $662.27 B. $1,461.17 C. $6,60.65 D. $1,321.30
A coupon bond with a par value of $1,000 and a 10-year maturity pays semiannual coupons...
A coupon bond with a par value of $1,000 and a 10-year maturity pays semiannual coupons of $21. (a) Suppose the yield for this bond is 4% per year compounded semiannually. What is the price of the bond? (b) Is the bond selling above or below par value? Why?
Suppose a five-year, $1000 bond with annual coupons has a price of $903.21 and a yield...
Suppose a five-year, $1000 bond with annual coupons has a price of $903.21 and a yield to maturity of 5.5 %. What is the bond's coupon rate?
1) A successful firm like Microsoft has consistently generated large profits for years. Is this a violation of the...
1) A successful firm like Microsoft has consistently generated large profits for years. Is this a violation of the Efficient Market Hypothesis (EMH)? 2) Behavioral finance posits that market prices may deviate from fundamental values because of investor psychology and that mispricing can persist if rational arbitrageurs face substantial limits to arbitrage. In our class lecture on behavioral finance, we discussed three "limits to arbitrage". Choose 2 of the 3 limits to arbitrage that we discussed and explain them. 3)...
10 year, zero-coupon government €1000 par value bond sells today for 495€. what is the yield...
10 year, zero-coupon government €1000 par value bond sells today for 495€. what is the yield to maturity for that bond?
yield to maturity ofAS1000bond with aG96 obupon rate, semiannualaupoits andfwoven to maturity is 7.6% APR, compo price be? unded semia 48 06 the spot rates for six months, ears are 1%, 1....
yield to maturity ofAS1000bond with aG96 obupon rate, semiannualaupoits andfwoven to maturity is 7.6% APR, compo price be? unded semia 48 06 the spot rates for six months, ears are 1%, 1.1%, and 13%, all quoted as semiannually in 1% 11. Assume the current Treasu e pounded APRs. What is the price of a$1000 par 4% coupon bon maturing in eer he one year, and ly years (the next coupon is exactly six months from sowi trading for $1034.74. l...
Suppose a five-year, $1000 bond with annual coupons has a price of $903.35 and a yield...
Suppose a five-year, $1000 bond with annual coupons has a price of $903.35 and a yield to maturity of 5.6%. What is the bond's coupon rate? round to three decimal places
Consider a 4-year, $1000 par value bond with zero coupons. If the yield to maturity is 10%, what would be the price of this bond? If the yield to maturity increases to 12% how much does the bond's price change?
20) Consider a 3-year, $1000 par value bond with zero coupons. The yield to maturity today is 10%. We plan to buy this bond right now (t=0), and sell it a year later (t=1). If the yield to maturity decreases to 8% after we buy this bond, and if we wait until time t=1 to sell this bond, what would be our annualized holding period return? (rounded to 2 decimals) a) -5.36% b) 4.11% c) 5.66% d) 14.11%
1) A successful firm like Microsoft has consistently generated large profits for years. Is this a violation of the Efficient Market Hypothesis (EMH)? 2) Behavioral finance posits that market prices may deviate from fundamental values because of investor psychology and that mispricing can persist if rational arbitrageurs face substantial limits to arbitrage. In our class lecture on behavioral finance, we discussed three "limits to arbitrage". Choose 2 of the 3 limits to arbitrage that we discussed and explain them. 3)...
yield to maturity ofAS1000bond with aG96 obupon rate, semiannualaupoits andfwoven to maturity is 7.6% APR, compo price be? unded semia 48 06 the spot rates for six months, ears are 1%, 1.1%, and 13%, all quoted as semiannually in 1% 11. Assume the current Treasu e pounded APRs. What is the price of a$1000 par 4% coupon bon maturing in eer he one year, and ly years (the next coupon is exactly six months from sowi trading for $1034.74. l...
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