An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? A) $828. B) $893. C) $1,000. D) $1,686. *PV of $1 ordinary annuity is 17.15909: n = 40; i = 5% **PV of $1 is 0.14205: n = 40; i = 5% O A
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- You intend to purchase a 10-year, $1,000 face value bond that pays interest of $60 every 6 months. If your nominal annual required rate of return is 10 percent with semiannual compounding, how much should you be willing to pay for this bond? Select one: O a. $1,124.62 O b. $1,086.15 O c. $ 957.50 O d. $826.31 O e. $1,032.20Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 percent, the future value of the bond (the amount the bond pays in one year) is? a. P1,560.00 b. P1,540.00 c. P1,440.00 d. 1,442.31A bond pays $50,000 per year and has a face value of $500,000 at theend of 8 years when it has to be redeemed. If its current discounted priceis $390,000, what true interest could be earned on the bond? Ans. (14.9%)
- an investor purchasea a 20-year, 1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what's the current market value of the bond?Use the following tables to calculate the present value of a $375,000 @ 5%, 5-year bond that pays $18,750 interest annually, if the market rate of interest is 10%. Round to the nearest dollar. Present Value of $1 ¦ Present Value of Annuity of $1 Periods 5 % 6 % 7 % 10 % ¦ Periods 5 % 6 % 7 % 10 % 1 .95238 .94340 .93458 .90909 ¦ 1 .95238 .94340 .93458 .90909 2 .90703 .89000 .87344 .82645 ¦ 2 1.85941 1.83339 1.80802 1.73554 3 .86384 .83962 .81630 .75131 ¦ 3 2.72325 2.67301 2.62432 2.48685 4 .82270 .79209 .76290 .68301 ¦ 4 3.54595 3.46511 3.38721 3.16987 5 .78353 .74726 .71299 .62092 ¦ 5 4.32948 4.21236 4.10020 3.79079 6 .74622 .70496 .66634 .56447 ¦ 6 5.07569 4.91732 4.76654 4.35526 7 .71068 .66506 .62275 .51316 ¦ 7 5.78637 5.58238 5.38929 4.86842 8 .67684 .62741 .58201 .46651 ¦ 8 6.46321…An investor purchases a 15-year, $100,000 par value bond that pays semiannual interest of $4,000. If the semiannual market rate of interest is 5%, what is the current market value of the bond? $89,620.34 $100,000.00 $84,627.55 $79,568.15
- 1. Suppose that you purchase the T-bill maturing on September 15, 2020, for 9,991.362. The T-billmatures 122 days after the settlement date and has a face value of 10,000. The T-bill’s discountyield is _________.2. Based from the above information, the T-bill’s bond equivalent is __________. The EAR on the Tbill is ___________.3. The discount yield on the T-bill maturing on November 3, 2020 or 171 days from settlement dateis 0.328 percent. The price of the T-bill is ___________.4. The overnight fed funds rate was 0.41 percent. The conversion of the fed funds rate to a bondequivalent rate is ___________. The EAR on the fed funds is ___________.5. Assume that a bank enters a repurchase agreement in which it agrees to buy fed funds at a priceof 15,000,000 with the promise to sell these funds back at a price of P15,000,926.345 after 12days. The yield on this repo to the bank is ___________.6. An investor purchases a 45-day commercial paper with a par value of 500,000 for a price…Use the following tables to calculate the present value of a $487,000 @ 5%, 5-year bond that pays $24,350 interest annually, if the market rate of interest is 10%. Round to the nearest dollar. Present Value of $1 Present Value of Annuity of $1 Periods 5 % 6 % 7 % 10 % Periods 5 % 6 % 7 % 10 % 1 .95238 .94340 .93458 .90909 1 .95238 .94340 .93458 .90909 2 .90703 .89000 .87344 .82645 2 1.85941 1.83339 1.80802 1.73554 3 .86384 .83962 .81630 .75131 2.72325 2.67301 2.62432 2.48685 4 .82270 .79209 .76290 .68301 4 3.54595 3.46511 3.38721 3.16987 5 .78353 .74726 .71299 .62092 5 4.32948 4.21236 4.10020 3.79079 .74622 .70496 .66634 .56447 6 5.07569 4.91732 4.76654 4.35526 7 .71068 .66506 .62275 .51316 | 7 5.78637 5.58238 5.38929 4.86842 8 .67684 .62741 .58201 .46651 8 6.46321 6.20979 5.97130 5.33493 9. .64461 .59190 .54393 .42410 9. 7.10782 6.80169 6.51523 5.75902 10 .61391 .55839 .50835 .38554 10 7.72173 7.36009 7.02358 6.14457The stated rate is 5%; the market rate is 4%. The future value of Bonds payable is $1,000. When calculating the PV of the bonds what amount would you use as the annuity or annual payment? A $100 B $10 (C) $90 $50 E $40
- A bond has a face value of 2,000 $ is redeemable in 8 years , and pays interest of 200 $ at the end of each of the 8 years. what should be the maximum purchase price in $ for this bond if MARR = 8 % per year ? Select one: O a. 2,230 O b. 1,850 O c. 2,000 O d. 1,670 O e. 1,487Listen Assume that there is a bond that pays $20.00 at the and of year 2, and $105.00 at the end of year 7. It sells at a total =$(20.00+105.00). The Macauley duration of the bond is? Answer with two digits decimal accuracy. Blank Excel Worksheet Your AnswerThe stated rate is 5%; the market rate is 4%. The future value of Bonds payable is $1,000. When calculating the PV of the bonds what amount would you use as the annuity or annual payment? $40 $10 E $50 $90 $100