A bond offers a coupon rate of 9%, paid annually, and has a maturity of 15 years. The current market yield is 7%. Face value is $1,000. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond?
| K = N |
| Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k] + Par value/(1 + YTM)^N |
| k=1 |
| K =15 |
| Bond Price =∑ [(9*1000/100)/(1 + 7/100)^k] + 1000/(1 + 7/100)^15 |
| k=1 |
| Bond Price = 1182.16 |
| Using Calculator: press buttons "2ND"+"FV" then assign |
| PMT = Par value * coupon %=1000*9/(100) |
| I/Y =7 |
| N =15 |
| FV =1000 |
| CPT PV |
| Using Excel |
| =PV(rate,nper,pmt,FV,type) |
| =PV(7/(100),15,-9*1000/(100),-1000,) |
| capital gains yield = ((Ending price)/Beginning price-1) |
| =((1174.91)/1182.16-1) |
| =-0.61% |
| K = N |
| Bond Price =∑ [(Annual Coupon)/(1 + YTM)^k] + Par value/(1 + YTM)^N |
| k=1 |
| K =14 |
| Bond Price =∑ [(9*1000/100)/(1 + 7/100)^k] + 1000/(1 + 7/100)^14 |
| k=1 |
| Bond Price = 1174.91 |
| Using Calculator: press buttons "2ND"+"FV" then assign |
| PMT = Par value * coupon %=1000*9/(100) |
| I/Y =7 |
| N =14 |
| FV =1000 |
| CPT PV |
| Using Excel |
| =PV(rate,nper,pmt,FV,type) |
| =PV(7/(100),14,-9*1000/(100),-1000,) |
A bond offers a coupon rate of 9%, paid annually, and has a maturity of 15...
A bond offers a coupon rate of 12%, paid annually, and has a maturity of 9 years. The current market yield is 11%. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond?
A bond offers a coupon rate of 13%, paid annually, and has a maturity of 17 years. The current market yield is 13%. Face value is $1,000. If market conditions remain unchanged, what should be the Capital Gains Yield of the bond? Enter your answer as a percentage, without the percentage sign ('%'), and rounded to 2 decimals. Use the minus sign ('-') if the yield is negative.
A bond offers a coupon rate of 13%, paid semiannually, and has a maturity of 10 years. Face value is $1,000. If the current market yield is 8%, what should be the price of this bond? Enter your answer in dollars, without the dollar sign ('$'), and rounded to the nearest cent (2 decimals).
A $1,000 bond has a coupon rate of 9% that is paid semi-annually, and has 5 years until it matures. The current yield to maturity is 7% a. What is the price of the bond? ___________ b. What is the amount of the annual interest paid to the bondholder? ___________ c. Is this a discount bond or a premium bond? ______________________
A bond has a face value of $1,000, a coupon of 5% paid annually, a maturity of 34 years, and a yield to maturity of 8%. What rate of return will be earned by an investor who purchases the bond for $652.39 and holds it for 1 year if the bond’s yield to maturity at the end of the year is 9%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount...
Compute the duration of a bond with a face value of $1,000, a coupon rate of 7% (coupon is paid annually) and a maturity of 10 years as the interest rate (or yield to maturity) on the bond changes from 2% to 12% (consider increments of 1% - so you need to compute the duration for various yields to maturity 2%, 3%, …, 12%) . What happens to duration as the interest rate increases?
A bond has a par value of $1,000, a time to maturity of 15 years, and a coupon rate of 8.90% with interest paid annually. If the current market price is $890, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
1a. Calculate the price of a bond where the coupon rate is 5% (pays annually), the market interest rate is 4%, and the life of the bond is 10 years. 1b. Suppose that you have an annual pay 7-year bond with a price of $1,100, paying a 4.5% coupon, with a face value of $1,000. What is the bond’s yield to maturity (YTM)? 1c. A bond sells for $900 today. Its coupon rate is 3%. The expected price in one...
A bond that compounds annually has a Face Value of $1,000 and maturity of 15 years. Assume that its coupon rate is 8% and yield to maturity (YTM) is 6.12%. What is this bond’s market price?
a corporate bond has 15 years left to maturity. it offers a coupon rate of 9.5% (paid semiannuall) on a $1000 par value. if it is currently selling in the market for $1140, what is its yield to maturity? 9.18% 8.23% 7.89% 6.84%