HomeworkLib
Question

A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond...

A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond matures in 3 years and pays interest annually. The coupon rate is 7 percent. What is the current price of this bond?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
I got $1008.18.

I basically plugged in the following into a financial calculator:
N = 3 years
I = 6.69%
PMT = 70 (the annual coupon payments)
FV = 1000

This returns PV = -$1008.18

I guess that makes sense. The coupon rate is higher than the market rate, so we have to pay a very small premium above $1000.
0 0
Add a comment
Answer #2

Present value of bond = 1-(1.0669) 1000.07 061609「) + 1000(1.0669)-3-1008.18

0 0
Add a comment
Know the answer?
Add Answer to:
A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 15 1 pts A $1,000 face value bond currently has a yield to maturity of...

    Question 15 1 pts A $1,000 face value bond currently has a yield to maturity of 6.69%. The bond matures in three years and pays interest annually. The coupon rate of the bond is 7.00%. What is the current price of this bond? $823.43 $1,008.18 $1,000.00 $991.86

  • Question 15 1 pts A $1,000 face value bond currently has a yield to maturity of...

    Question 15 1 pts A $1,000 face value bond currently has a yield to maturity of 6.69%. The bond matures in three years and pays interest annually. The coupon rate of the bond is 7.00%. What is the current price of this bond? $1,008.18 $991.86 $823.43 $1,000.00

  • 1) A $1,000 face value bond currently has a yield to maturity of 6.03 percent. The...

    1) A $1,000 face value bond currently has a yield to maturity of 6.03 percent. The bond matures in thirteen years and pays interest semiannually. The coupon rate is 6.25 percent. What is the current price of this bond? 2) The $1,000 face value bonds of Galaxies International have coupon of 5.5 percent and pay interest semiannually. Currently, the bonds are quoted at 98.02 and mature in 12 years. What is the yield to maturity? 3) Variance Logistics wants to...

  • 19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value,...

    19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value, and pays interest semi-annually. What is the bond's current price if the yield to maturity is 6.97 percent? A. $799.32 B. $848 16 C. $917.92 D. $1,005.46 E. None of the above.l 19. A bond has 8 years to maturity, a 7 percent coupon, a $1,000 face value, and pays interest semi-annually. What is the bond's current price if the yield to maturity is...

  • A semiannual corporate bond has a face value of $1.000, a yield to maturity of 1.2 percent, and a coupon rate of 7.5 percent.

    9. A semiannual corporate bond has a face value of $1.000, a yield to maturity of 1.2 percent, and a coupon rate of 7.5 percent. The bond matures 10 years from today. This bond: a. pays interest payments of $75.00 every six months. b. sells at par value. c. is currently quoted at a price of 101.02. d. has a current yield of 7.34 percent 10. Determine how much you would be willing to pay for a bond that pays $60 annually indefinitely and never...

  • A bond has a $1,000 face value and a $1,146 market value. The bond pays interest semi-annually, has a yield-to-maturity...

    A bond has a $1,000 face value and a $1,146 market value. The bond pays interest semi-annually, has a yield-to-maturity of 7.47 percent, and matures in 10 years. What is the current yield?

  • A bond has a face value of $1,000, a coupon rate of 8%, and a maturity...

    A bond has a face value of $1,000, a coupon rate of 8%, and a maturity of 10 years. It pays interest annually, and the yield to maturity is 12%. In WORDS (1-2 complete sentences each) answer the following questions. What does it mean that the bond above has a face value of $1,000? What does it mean that the bond has a coupon rate of 8%? What does it mean that the bond has a maturity of 10 years?...

  • Calculate the Yield to Maturity for a bond that has: a face value of $100, a...

    Calculate the Yield to Maturity for a bond that has: a face value of $100, a current price of $90, a coupon rate of 3.5% paid annually, and the bond matures in six years.

  • Springfield Nuclear Energy Inc. bonds are currently trading at $1291.39, The bonds have a face value...

    Springfield Nuclear Energy Inc. bonds are currently trading at $1291.39, The bonds have a face value of $1,000 a coupon rate of 10.5% with coupons paid annually, and they mature in 15years. What is the yield to maturity of the bonds? The yield to maturity of the bonds is ____ beam inc. bonds are trading today for a price of ​$798.96. the bond pays annual coupons with a coupon rate of 6​% and the next coupon is due in one...

  • show all work Mr. Bond is considering purchasing a bond with 10-year maturity and $1,000 face...

    show all work Mr. Bond is considering purchasing a bond with 10-year maturity and $1,000 face value. The coupon interest rate is 8% and the interest is paid annually. If Mr. Bond requires 12% yield to maturity on the investment, then, what is price of the bond ? You have just purchased a 5-year, $1,000 par value bond. The coupon rate on this bond is 12%, and the interest is paid annually. If you expect to eam a 10 percent...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT