Homework Answers
rate positively ..
| Ans 14 | correct answer is option :- | |||||||||
| b) YTM is lower than 7% | ||||||||||
| This is because bond is trading at premium and therefore interest rate shold be lower than 7% | ||||||||||
| Ans 15 | correct answer is option :- | |||||||||
| c) Capital loss ; capital gain | ||||||||||
| Ans 16 | correct answer is option :- | |||||||||
| a) longer | ||||||||||
Add Answer to:
B. shorter Bond (15 points) 14. (3 points) A bond is traded at premium and pays...
5. Eleven years from now the bond will have 1 year until maturity. Assume market interest...
5. Eleven years from now the bond will have 1 year until maturity. Assume market interest rates are at 7 percent, the same place they were when the bond was issued. Given this: k. What will be the bond's price 11 years from now? 1. What will be the current yield eleven years from now? m. What is the expected capital gains yield eleven years from now? n. How does you answers to part (1) and (m) compare with your...
Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B...
Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B has a coupon rate of 12%. Both bonds pay their coupons semiannually. a. Compute the prices of the two bonds (using Excel's bond price function) at each interest rate. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Yield 2% 3% 4% 5% 6% 7% 8% Price A 1,449.55 1,196.90 1,000.00 845.46 723.24 625.83 547.53 484.05 432.12 389.26 353.54 Price B...
Which of the following statements is CORRECT? A bond's current yield must always be either equal...
Which of the following statements is CORRECT? A bond's current yield must always be either equal to its yield to maturity or between its yield to maturity and its coupon rate. If a bond sells at par, then its current yield will be less than its yield to maturity. If a bond sells for less than par, then its yield to maturity is less than its coupon rate. A discount bond's price declines each year until it matures, when its...
and X is a premium bond making semiannual payments. The bond pays a coupon rate of...
and X is a premium bond making semiannual payments. The bond pays a coupon rate of 8.5%, has a YTM of 7%, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 7%, has a YTM of 8.5%, and has 13 years to maturity. What is the price of each bond today? If interest rates are unchanged, what do you expect the price of these bonds to be...
please use excel coding Bond X is a premium bond making semiannual payments. The bond pays...
please use excel coding
Bond X is a premium bond making semiannual payments. The bond pays a 9 percent coupon, has a YTM of 7 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a 7 percent coupon, has a YTM of 9 percent, and also has 13 years to maturity. What is the dollar price of each bond today? If interest rates remain unchanged, what do you expect the...
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...
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...
1. 7-4: Bond Yields Yield to call Seven years ago the Singleton Company issued 22-year bonds...
1. 7-4: Bond Yields Yield to call Seven years ago the Singleton Company issued 22-year bonds with a 12% annual coupon rate at their $1,000 par value. The bonds had a 7% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places. % Explain why the...
INTEREST RATE SENSITIVITY An investor purchased the following 5 bonds. Each bond had a par value...
INTEREST RATE SENSITIVITY An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and an 10% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 5%. 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...
1. (12 points) A bondholder owns one corporate bond that pays semi-annual coupons, has 6 percent...
1. (12 points) A bondholder owns one corporate bond that pays semi-annual coupons, has 6 percent coupon rate, and a face value of $1000. The bond has 5 years to maturity, and it currently traded at par. (1) Based on the information that the bond is traded at par, what is the YTM of the bond currently? (2) If the YTM of the bond rises to 7 percent one year later, what is the new price of the bond? (3)...
5. Eleven years from now the bond will have 1 year until maturity. Assume market interest rates are at 7 percent, the same place they were when the bond was issued. Given this: k. What will be the bond's price 11 years from now? 1. What will be the current yield eleven years from now? m. What is the expected capital gains yield eleven years from now? n. How does you answers to part (1) and (m) compare with your...
Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B has a coupon rate of 12%. Both bonds pay their coupons semiannually. a. Compute the prices of the two bonds (using Excel's bond price function) at each interest rate. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Yield 2% 3% 4% 5% 6% 7% 8% Price A 1,449.55 1,196.90 1,000.00 845.46 723.24 625.83 547.53 484.05 432.12 389.26 353.54 Price B...
and X is a premium bond making semiannual payments. The bond pays a coupon rate of 8.5%, has a YTM of 7%, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 7%, has a YTM of 8.5%, and has 13 years to maturity. What is the price of each bond today? If interest rates are unchanged, what do you expect the price of these bonds to be...
please use excel coding
Bond X is a premium bond making semiannual payments. The bond pays a 9 percent coupon, has a YTM of 7 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a 7 percent coupon, has a YTM of 9 percent, and also has 13 years to maturity. What is the dollar price of each bond today? If interest rates remain unchanged, what do you expect the...
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...
INTEREST RATE SENSITIVITY An investor purchased the following 5 bonds. Each bond had a par value of $1,000 and an 10% yield to maturity on the purchase day. Immediately after the investor purchased them, interest rates fell, and each then had a new YTM of 5%. 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...
1. (12 points) A bondholder owns one corporate bond that pays semi-annual coupons, has 6 percent coupon rate, and a face value of $1000. The bond has 5 years to maturity, and it currently traded at par. (1) Based on the information that the bond is traded at par, what is the YTM of the bond currently? (2) If the YTM of the bond rises to 7 percent one year later, what is the new price of the bond? (3)...
Most questions answered within 3 hours.
-
1. Which of the following is false about photosynthesis?
A. ATP is the molecule used to...
asked 10 minutes ago -
A simple random sample of size n=64 is obtained from a
population with a mean of...
asked 1 hour ago -
(2 dimensions, 1 object, 2 accelerations)
1) A projectile is thrown with a wind. The wind...
asked 1 hour ago -
Brian makes $34,100 per year. How much can Brian expect to
contribute to FICA taxes in...
asked 2 hours ago -
To buy a new house you must borrow $155,000. To do this you take
out a...
asked 2 hours ago -
Spacely Sprockets is evaluating the construction of a new plant
on land the company purchased for...
asked 3 hours ago -
1. Consider a linear regression model of y on K regressors and
an intercept.
(i) Describe...
asked 3 hours ago -
Enter a balanced equation for the reaction between hydrochloric
acid and sodium sulfite.
Express your answer...
asked 3 hours ago -
Give a regular expression describing the language
{x | x ∈ Σ* and x does not...
asked 3 hours ago -
Masses of 1.0 kg, 2.0 kg, and 3.0 kg are each separately subject
to a net...
asked 4 hours ago -
The mode of philosophical argumentation and thought. How do
philosophers think and write? What is important...
asked 4 hours ago -
At the beginning of the unit, you were asked whether you thought
it was appropriate or...
asked 4 hours ago