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- You purchased a bond on January 1, 2018 which matures 7 years later on December 31st. The bond has a par value of $1,000, a stated coupon rate of 6.0% and pays interest semi-annually. On January 1, 2020, the bond sells for $928.50. What is its yield to maturity?You bought a newly issued 10-year, $1,000 par value, 5.50% coupon bond (with semiannual coupon payments) on May 1, 2023. You decided to check the value and yields on the bond annually, so that you can keep track of your wealth. Your first check was to be done on May 1, 2024. On April 15, 2024, the yield to maturity for the bond changed to 5.20%. For your two year anniversary of owning the bond (May 1, 2025), calculate the bond's total yield for the second year of ownershipYou are interested in purchasing a bond maturing on November 1st, 2029. The bond pays semiannual coupons at a 6% annual coupon rate. It has a discount rate of 4% and a $1,000 par value. Today is November 1st, 2023. What is the price (in terms of dollars) of the bond?
- A $11,000 bond with a coupon rate of 5.35% is redeemable on July 01, 2031. It is purchased on February 10, 2025 when the yield rate is 5.85% compounded semi- annually. Please include a well-labelled timeline diagram. a. What is the purchase price of the bond? Round to the nearest cent b. What is the amount of discount or premium on the bond?On January 2021, you buy a 10-year coupon bond with coupon payments of $10,000 per year and a final value of $100,000. The yield to maturity of this bond is 10 percent. On January 2022, you collect your first coupon and sell the bond in the bond market. On January 2022 the yield to maturity of this bond decreases to 8 percent. Calculate the following: a. holding period return rate b. current yield rate c. capital gain rate Please include formulas and calculationsTwo years ago (i.e., in November 2018), you purchased a newly-issued 30-year Treasury bond with a coupon rate of 3.25% (APR with semi-annual compounding). The face value of the bond is $10,000 and you purchased it at the face value. The bond pays semi-annual coupons each November and each May. The coupon payment for November 2020 has just been made and you expect to obtain the next coupon payment exactly six months from today in May 2021. The bond matures after exactly 28 years in November 2048. The current yield to maturity (i.e., in November 2020) on this bond is 1.60% (APR with semi-annual compounding) due to the recent rate declines by the Federal Reserve and due to the slowdown of the economy. What is the current price of this bond?
- A bond that has a face value of $1,500 and coupon rate of 3.10% payable semi- annually was redeemable on July 1, 2035. Calculate the purchase price of the bond on February 10, 2029 when the yield was 3.60% compounded semi-annually. Please include a well-labelled timeline diagram. Full solutions should be shown on separate sheets of paper. Submit your solutions. a. What was the purchase price of the bond? Round to the nearest cent b. What was the amount of discount or premium on the bond? (click to select) v amount is Round to the nearest centYou purchase a corporate bond on January 1, 2008. The bond has an 8% annual coupon (interest paid annually), $1000 par value, and 10 years until maturity. The yield to maturity on the bond is 7%. Assume you sell the bond after 1 year (i.e., on January 1, 2009); the yield to maturity on the bond is now 6%. What is your holding period return on the bond?On May 1, 2021, you are considering to buy a newly-issued ABC Company bond, which is quoted as "ABC 5.6s34" in the WSJ and has a par value of $1,000. The company pays coupon interests every 6 months. If you require a 6.9% return on this bond, how much would you pay for this bond? (Hint: Identify annual coupon rate, years to maturity, and yield to maturity to compute the bond price.) Group of answer choices a. $883.78 b. $889.60 c. $885.22 d. $886.60 e. $887.12
- I am thinking about buying a $100 heineken corporate bond. The bond was issued on Nov. 2005 with a coupon rate of 7.5% per year and it matures on Oct. 31, 2025. If I purchase the bond on Nov. 1, 2021 for $93.12, will I earn a return at least 8.0% per year (nominal) on the investment? Assume coupons are paid twice per year (on April 30 and October 31). You must draw a cash flow diagram to get full credit for this problem.Today an investor purchases a 30-year bond (face value =\$1,000) for $627.73. The bond has a coupon rate of 4% and a yield to maturity of 7%. It pays coupons annually (not semiannually). The investor plans to hold the bond for 1 year. If the yield to maturity of the bond becomes 8% at the end of the year, what is the bond rate of return over the year?Commonstealth Bank issued a bond that pays a 7.20% coupon quarterly and matures at the end of September 2036. If the current market rate for similar bonds is 6.50%, what is the bond price at the end of October 2021? Show your workings and round your final answers to two decimal places.