1.How to find the current yield oll bond? 2. is an APR an effective annual rates? 3. which bonds are important in tod...
Homework Answers
1. Current yield is the ratio of the annual coupon to the
current price of the bond .
Current Yield =Coupon/Price
2. No APR is not effective annual rate .
EAR =(1+APR/n)^n -1 . Here n is the number of compounding. Higher
the number of compounding higher the effective annual rate.
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1.How to find the current yield oll bond? 2. is an APR an effective annual rates? 3. which bonds are important in tod...
Question 6 2 pts What is the current yield and the effective annual yield of the...
Question 6 2 pts What is the current yield and the effective annual yield of the bond with the following characteristics? 6.4% 2 Annual coupon rate Coupons per year Face value YTM Bond Market Price $100 7.42% $90 O Current Yield = 6.99%; Effective annual yield-7.87% Current Yield = 7.87%; Effective annual yield=6.99% Current Yield - 7.11%; Effective annual yield-7.55% Current Yield = 7.55%: Effective annual yield-7.11%
6.4.1 Yield rates (quoted as effective annual) for zero coupon bonds are as follows: 1-year maturity:...
6.4.1 Yield rates (quoted as effective annual) for zero coupon bonds are as follows: 1-year maturity: 10%, 2-year maturity: 8%. You take the following actions: 1. Sell a one-year zero coupon bond with maturity valuc 1000. 2. Invest the proceeds in a two-year zero coupon bond. Which of the following represents your overall net position? (A) One year forward investment for one year at 6% (B) One year forward investment for one year at 12% (C) One year forward loan...
1. Effective Annual Rates. You are given the choice between investing money at an APR of...
1. Effective Annual Rates. You are given the choice between investing money at an APR of 9% compounded annually or an APR of 8.5% compounded daily. (a) Which APR and compounding combination offers the higher effective annual re- turn? (b) For what APR does daily compounding offer the same effective annual return as 9% compounded annually?
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million...
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million commercial paper issue that currently sells at 96.375 percent of its face value and is 70 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) 1.) Discount Yield % (Round all answers to 3 decimal places)...
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million...
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 99.375 percent of its face value and is 65 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161) Discount yield Bond equivalent yield Effective annual return
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million...
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 96.375 percent of its face value and is 80 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield Effective annual return % %
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million...
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 96.375 percent of its face value and is 80 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield Effective annual return %
A 3 year, 1000 par value bond has 8% annual coupons and an annual effective yield...
A 3 year, 1000 par value bond has 8% annual coupons and an annual effective yield of 7%. Find the Macaulay duration of this bond.
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million...
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 93 3/8 percent of its face value and is 70 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places.
4. The current yield on bond B, which has semiannual coupons, is 7.08% and the bond...
4. The current yield on bond B, which has semiannual coupons, is 7.08% and the bond was sold at par (i.e., at a price of $1,000) three years ago, when the YTM on similar bonds was 8.0%. If there are 12 years until maturity, what would be the YTM to an investor who buys the bond today? (Hint: If the bond's price was $1,000 three years ago, when the market interest rate was 8.0%, what must be the coupon rate?...
Question 6 2 pts What is the current yield and the effective annual yield of the bond with the following characteristics? 6.4% 2 Annual coupon rate Coupons per year Face value YTM Bond Market Price $100 7.42% $90 O Current Yield = 6.99%; Effective annual yield-7.87% Current Yield = 7.87%; Effective annual yield=6.99% Current Yield - 7.11%; Effective annual yield-7.55% Current Yield = 7.55%: Effective annual yield-7.11%
6.4.1 Yield rates (quoted as effective annual) for zero coupon bonds are as follows: 1-year maturity: 10%, 2-year maturity: 8%. You take the following actions: 1. Sell a one-year zero coupon bond with maturity valuc 1000. 2. Invest the proceeds in a two-year zero coupon bond. Which of the following represents your overall net position? (A) One year forward investment for one year at 6% (B) One year forward investment for one year at 12% (C) One year forward loan...
1. Effective Annual Rates. You are given the choice between investing money at an APR of 9% compounded annually or an APR of 8.5% compounded daily. (a) Which APR and compounding combination offers the higher effective annual re- turn? (b) For what APR does daily compounding offer the same effective annual return as 9% compounded annually?
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 99.375 percent of its face value and is 65 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161) Discount yield Bond equivalent yield Effective annual return
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 96.375 percent of its face value and is 80 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield Effective annual return % %
What is the discount yield, bond equivalent yield, and effective annual return on a $1 million T-bill that currently sells at 96.375 percent of its face value and is 80 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield Effective annual return %
4. The current yield on bond B, which has semiannual coupons, is 7.08% and the bond was sold at par (i.e., at a price of $1,000) three years ago, when the YTM on similar bonds was 8.0%. If there are 12 years until maturity, what would be the YTM to an investor who buys the bond today? (Hint: If the bond's price was $1,000 three years ago, when the market interest rate was 8.0%, what must be the coupon rate?...
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