Homework Answers
a. Three year zero coupon bond
This is because the principal amount is discounted over a shorter time as compared to 5 years which will further diminish the value .
b A three year 4 % coupon bond
This is because in the case of a ZCB , only the final principal amount is discounted whereas in a coupon paying bond , not only is the principal discounted but the coupons are discounted too which will increase the price of the bond .
c. a two year 6% bond
This is because higher the coupon payment lesser its effect on the price of the bond and higher the coupon , higher the price.
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do not round For each of the following pairs of Treasury securities (each with $1,000 par value), identify which wil...
This Question: 1 pt 8 of 19 (13 complete) For each of the following pairs of...
This Question: 1 pt 8 of 19 (13 complete) For each of the following pairs of Treasury securities (each with $1,000 par value), identify which will have the higher price A three-year zero coupon bond or a five-year zero-coupon bond? b. A three-year zero-coupon bond or a three-year 4% coupon bond? c. A two-year 5% coupon bond or a two-year 6% coupon bond? a. A three-year zero-coupon bond or a five-year zero-coupon bond? Which will have the higher price? (Select...
A. An investor purchased the following five bonds. Each bond had a par value of $1,000...
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12. The current price of a 1-year zero-coupon Treasury bond is $975 (with $1,000 par value)....
12. The current price of a 1-year zero-coupon Treasury bond is $975 (with $1,000 par value). If the annual forward rate between year 1 and 2 implied by the zero yield curve is equal to 4.5%, what is the current price of a 2-year zero-coupon Treasury bond (with $1,000 par value)? (a) $950.63 (b) $933.01 (c) $924.56 (d) $1,000.00
An investor purchased the following five bonds. Each bond had a par value of $1,000 and an 8% yield to maturity on t...
An investor purchased the following five bonds. Each bond had a par value of $1,000 and an 8% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 6%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers to...
7.7 An investor purchased the following five bonds. Each bond had a par value of $1,000...
7.7 An investor purchased the following five bonds. Each bond had a par value of $1,000 and a 11% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 7%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers...
An investor purchased the following live bonds. Each bond had a par value of $1,000 and...
An investor purchased the following live bonds. Each bond had a par value of $1,000 and a 8% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 6%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers to...
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your...
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.) 4.75 percent coupon corporate bond (paid semiannally) __________ 5.40 percent coupon treasury note _______ Corporate zero-coupon bond maturing in ten years ______
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your...
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.) 3.45 percent coupon corporate bond (paid semiannually) 4.20 percent coupon Treasury note Corporate zero-coupon bond maturing in 10 years
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Determine the interest payment for the following three bonds. (Assume a $1,000 par value) (Round your an places.) swers to 2 de 3.80 percent coupon corporate bond (paid semiannually) 4.55 percent coupon Treasury note Corporate zero-coupon bond maturing in 10 years 19.00
An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and...
An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and an 8% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 7%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Round your answers to the nearest cent or to two decimal places. Enter all amounts as...
This Question: 1 pt 8 of 19 (13 complete) For each of the following pairs of Treasury securities (each with $1,000 par value), identify which will have the higher price A three-year zero coupon bond or a five-year zero-coupon bond? b. A three-year zero-coupon bond or a three-year 4% coupon bond? c. A two-year 5% coupon bond or a two-year 6% coupon bond? a. A three-year zero-coupon bond or a five-year zero-coupon bond? Which will have the higher price? (Select...
12. The current price of a 1-year zero-coupon Treasury bond is $975 (with $1,000 par value). If the annual forward rate between year 1 and 2 implied by the zero yield curve is equal to 4.5%, what is the current price of a 2-year zero-coupon Treasury bond (with $1,000 par value)? (a) $950.63 (b) $933.01 (c) $924.56 (d) $1,000.00
An investor purchased the following live bonds. Each bond had a par value of $1,000 and a 8% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 6%. What is the percentage change in price for each bond after the decline in interest rates? Fill in the following table. Enter all amounts as positive numbers. Do not round intermediate calculations. Round your monetary answers to...
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.) 3.45 percent coupon corporate bond (paid semiannually) 4.20 percent coupon Treasury note Corporate zero-coupon bond maturing in 10 years
Determine the interest payment for the following three bonds. (Assume a $1,000 par value) (Round your an places.) swers to 2 de 3.80 percent coupon corporate bond (paid semiannually) 4.55 percent coupon Treasury note Corporate zero-coupon bond maturing in 10 years 19.00
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