Assume the government issues a semi- annual bond that matures in 5 years with a face value of $1,000 a coupon yield of 10 percent.What would be the price if the yield to maturity (semi-annual compounding) on similar government bonds were 8%?
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- A 10-year government bond has face value of OR 200 and a coupon rate of 6% paid semiannually. Assume that the interest rate is equal to 8% per year. What is the bond’s price? What is the reason for the difference in price on an annual and semiannually basis? Discuss the role of financial managers.A 10-year government bond has a face value of £100 and an annual coupon rate of 5%. Assume that the interest rate is equal to 6% per year. (a) Calculate the bond’s present value if it pays the interest annually, and also the present value if it pays semi-annually. (b) Calculate the market price of the bond when the interest rate changes to 8% please explain it on a paper with formula, not by excel.Assume the government issues a semi-annual bond that matures in 5 years with a face value of $1,000 a coupon yield of 10 percent. What would be the price if the yield to maturity (semi-annual compounding) on similar government bonds were 8%?
- Suppose that a 30-year government bond has a maturity value of $1000 and a coupon rate of 5%, with coupons paid semiannually. Find the market price of the bond if the yield rate is 4% compounded semiannually. (Round your answer to the nearest cent.). Assume an organization could issue a zero-coupon bond at an annual interest rate of 4 percent with semiannual compounding for 20 years. If it receives $2,264.45 for the bond, how much would it have to pay at the maturity date? How do you solve for the semi annual paymentThe government has issued a bond that will pay 2.000 in 10 years. The bond will pay no interim coupon payments.What is the present value of the bond if the discount rate is 12 percent?
- A government bond with 2 years until maturity has a face value of £120,000 and anannual nominal coupon rate of 1%. Assume that the relevant nominal market interestrate (annualized) is equal to 5%. The coupon payments are made every 6 months. Calculate the present value of the bond. Assume the individual coupons are stripped from the bond and soldseparately as zero coupon bonds. Calculate the market value of these zero couponbonds. Assume there are no further changes to the market rate. How would youexpect the price of the bond to evolve? Assume there exist a Callable bond with similar characteristics to thebond described above. Would you expect this Callable bond to have a higher orlower price? Explain why.A seven-year government bond makes annual coupon payments of 5% and offers an interest rate (ie. YTM) of 3% annually compounded. Suppose that one year later the bond still yields 3%. a) What is the bond price in year 0? b) What is the bond price in year 1? c) What return has the bondholder earned over the first year?A 5-year long-term corporate bond yields 10%. The real risk-free rate is 2%. Inflation is forecasted to average 2% a year for the next 5 years. The maturity risk premium is estimated to be 1%(t-3), where t is the maturity of the bond.What will be the nominal rate of the long-term 5-year government security?
- A 5-year government bond has a face value of £1,000 and an annual nominal couponrate of 8%. Assume that the relevant nominal market interest rate (annualized) is equalto 10%. The coupon payments are made quarterly.(a) Calculate the present value of the bond and the effective market interest rate.The government has issued a bond that will pay 2.000 in 10 years. The bond will pay no interim coupon payments. What is the present value of the bond if the discount rate is 12 percent?A 15-year Treasury bond is issued with face value of $1,000, paying interest of $58 per year. If market yields increase shortly after the T-bond is issued, what is the bond’s coupon rate? (