7.You buy a bond with $2,000 face value, 1 year to maturity and an 8% coupon...
7.You buy a bond with $2,000 face value, 1 year to maturity and an 8% coupon rate. You pay $1,900. You hold the bond until maturity. In this case, the yield to maturity is __________ while the rate of return is ___________.
Question options:
|
8%, 5.25%. |
|
|
about 13.68%, about 5.26%. |
|
|
about 13.68%, about 13.68% |
Homework Answers
as the bond has only 1 yr to maturity
ROR = Yeild to maturity
Paid = 1900 today
Will receive = 2000 + 0.08*2000 = 2160 after 1 yr
using formula P = F /(1+i)^t
1900 = 2160 (1+i)
I = 2160 / 1900 - 1
I = 1.1368 - 1 = 0.1368 = 13.68%
So last option is correct
Add Answer to:
7.You buy a bond with $2,000 face value, 1 year to maturity and
an 8% coupon...
Suppose you buy a TIPS bond with 1 year until maturity and an annual coupon of...
Suppose you buy a TIPS bond with 1 year until maturity and an annual coupon of 5.8%. If you buy the bond at face value and the inflation rate is 4.7%, then what will be your nominal return during the year?
You buy an) 5.4% coupon, 7-year maturity bond for $946. A year later, the bond price...
You buy an) 5.4% coupon, 7-year maturity bond for $946. A year later, the bond price is $1.056. Assume coupons are paid once a year and the face value is $1,000. a. What is the new yleld to maturity on the bond (one year from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to maturity b. What is your bond's rate of return over the year? (Round your answer to 2 decimal places) Rate...
You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000...
You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.7%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return
You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 a...
You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.7%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return = %
You are planning to buy a corporate bond with a 7-year maturity that pays 7% coupon...
You are planning to buy a corporate bond with a 7-year maturity that pays 7% coupon interest. The bond is priced at $108,500 per $100,000 par value. You expect to sell the bond in 2 years when a similar-risk 5-year bond is priced to yield 7.2% annually to maturity. Assuming that you can reinvest all cash flows at an 8% annual rate (4% semiannually), calculate your expected total return over the two-year holding period.
A bond has three years to maturity, a $ 2,000 face value, and a 6% coupon...
A bond has three years to maturity, a $ 2,000 face value, and a 6% coupon rate with annual coupons. What is its yield to maturity if it is currently trading at $1,826?
You buy a(n) 5.5% coupon, 8-year maturity bond for $985. A year later, the bond price...
You buy a(n) 5.5% coupon, 8-year maturity bond for $985. A year later, the bond price is $1,160. Assume coupons are paid once a year and the face value is $1,000. a. What is the new yield to maturity on the bond (one year from now)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is your bond's rate of return over the year? (Round your answer to 2 decimal places.)
at the beginning of the year, you bought a regular bond sith the folleing info: Coupon...
at the beginning of the year, you bought a regular bond sith the folleing info: Coupon Rate: 8%, Face Value: 10,000, Interest Rate: 5.5%, Maturity: 35 years, Coupon payment is made at the end of each year. a) What should the fair value/price of the bond be when rounded to nearest two decimal places? b) if the market price for this bond is $7,343.43 and you chose to pay that price to have the bond and hold it until maturity,...
8. You buy an eight-year bond that has a 6% current yield and a 6% coupon...
8. You buy an eight-year bond that has a 6% current yield and a 6% coupon rate (coupons will be paid annually). The face value is $1000. In one year, the yield-to-maturity of this bond has dropped to 5%. What is the bond’s holding-period return? ____%
If you pay $1200 today for a new $1000 face value two-year bond with a 8%...
If you pay $1200 today for a new $1000 face value two-year bond with a 8% coupon rate, your rate of return, or yield to maturity is 8% More than 8% Less than 8% Need more information to calculate Base on the Pure Expectations Theory of interest rates, if the one-year rate is 4%, and the one-year rate, one year from now, is expected to be 10% the current two-year rate should be 7% 3% 6% 14% If you pay...
You buy an) 5.4% coupon, 7-year maturity bond for $946. A year later, the bond price is $1.056. Assume coupons are paid once a year and the face value is $1,000. a. What is the new yleld to maturity on the bond (one year from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Yield to maturity b. What is your bond's rate of return over the year? (Round your answer to 2 decimal places) Rate...
You buy a 20-year bond with a coupon rate of 7.6% that has a yield to maturity of 9.7%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 10.7%. What is your return over the 6 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.) Rate of return
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago