Question

A four year bond with face value $100 and paying a coupon of 6% semiannually is...

A four year bond with face value $100 and paying a coupon of 6% semiannually is trading at $110. What is yield of this bond? Assume the rate given is continuously compounded.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Yielld= coupon rate * par value/ current price

         =((6*$100)/100). / $100

         =((6 / 110)*100)

         =5.45%

So. Yield of this bond is 5.45%

Add a comment
Know the answer?
Add Answer to:
A four year bond with face value $100 and paying a coupon of 6% semiannually is...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

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
  • consider a bond with a face value of $100 paying an annual coupon of $20 and...

    consider a bond with a face value of $100 paying an annual coupon of $20 and maturing in two years. the one-year interest rate is 10% and the two-year interest rate is 7%. what is the yield to maturity of the bond?

  • Ford Motor Company issues a 5-year bond with a coupon rate of 7% and a face...

    Ford Motor Company issues a 5-year bond with a coupon rate of 7% and a face value of $100. The bond pays interest semiannually. What is the price of the bond if the yield to maturity is 6% compounded semiannually? Please provide the excel formula to help with the solution.

  • 1) Consider a 10-year bond trading at $1150 today. The bond has a face value of...

    1) Consider a 10-year bond trading at $1150 today. The bond has a face value of $1,000, and has a coupon rate of 8%. Coupons are paid semiannually, and the next coupon payment is exactly 6 months from now. What is the bond's yield to maturity? 2)A coupon-paying bond is trading below par. How does the bond's YTM compare to its coupon rate? a. Need more info b. YTM = Coupon Rate c. YTM > Coupon Rate d. YTM <...

  • 4. Betty and Bob purchase an 8 year coupon bond with face and redemtion value of...

    4. Betty and Bob purchase an 8 year coupon bond with face and redemtion value of $10,000 and a coupon rate of 12% per annum payable semiannually and a yield to maturity of 16% per annum compounded semiannually. Algebraically find the purchase price.

  • A 13-year, 6 percent coupon bond pays interest semiannually. The bond has a face value of...

    A 13-year, 6 percent coupon bond pays interest semiannually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent? A) 1.97 percent increaseB) 1.79 percent increaseC) 1.79 percent decreaseD) 1.6 percent decreaseE) 1 percent decrease I need to solve it with this calcualter , please, ( Texas Instruments - BA II Plus) step by...

  • 2. You own a 20-year, $1000 face value bond paying 8% coupon annually. What should be...

    2. You own a 20-year, $1000 face value bond paying 8% coupon annually. What should be the market price of the bond so that its Yield to Maturity is exactly 10%? You also own a 30-year, $1000 face value bond paying 9% coupon annually. If your required rate of return is 9%, what should be the value of the bond?

  • d. Assume that you have a one-year coupon bond with a face value of $1,000 and...

    d. Assume that you have a one-year coupon bond with a face value of $1,000 and a coupon payment of $50. What is the price of the bond if the yield to maturity is 6%? e. Assume that you have the same bond is in part d, except instead of paying one annual payment of $50, the bond pays two semi-annual payments of $25 (one six months from now and another payment in twelve months). What is the price of...

  • 1. You own a 20-year, $1000 face value bond paying 8% coupon annually. If market price...

    1. You own a 20-year, $1000 face value bond paying 8% coupon annually. If market price of the bond is 1000, what should be the Yield to Maturity of the bond? You also own a 20-year, $1000 face value bond paying 8% coupon annually. What should be the market price of the bond so that its Yield to Maturity is exactly 10%?

  • 3. You own a 30-year, $1000 face value bond paying 9% coupon annually. If market price...

    3. You own a 30-year, $1000 face value bond paying 9% coupon annually. If market price of the bond is 1500, what should be the Yield to Maturity of the bond? You also own a 30-year, $1000 face value bond paying 9% coupon annually. What should be the market price of the bond so that its Yield to Maturity is exactly 7%?

  • You have a four-year bond with a coupon rate CR = 2% and a face value...

    You have a four-year bond with a coupon rate CR = 2% and a face value of $1,000. The bond makes annual coupon payments and its yield to maturity is 19% p.a. If the bond's yield to maturity decreases by 1% (i.e., by 100 basis points), find the resulting percentage change in the bond's price.

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