What is the market price of a $1,000, 9 percent bond paying a semiannual coupon if comparable market interest rates drop to 6 percent and the bond matures in 15 years? (Hint: Use Appendix A-2 and Appendix A-4.) Round Present Value of a Single Amount and Present Value of a Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest dollar. $
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- Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?What is the market price of a $1,000, 5 percent bond paying a semiannual coupon if comparable market interest rates rise to 12 percent and the bond matures in 14 years? Round your answer to the nearest dollar. (Hint: Use Appendix A-2 and Appendix A-4.) Round 'Present value of a Single Amount' and 'Present value of a Series of Equal Amounts' in intermediate calculations to four decimal places.Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Price $983.78 865.89 797.92 732.00 660.24 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4?
- Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) 1 2 3 4 5 Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4? Required A Price $940.93 Complete this question by entering your answers in the tabs below. 868.39 800.92 735.40 670.48 Required B Maturity (years) 2 3 Calculate the forward rate of interest for each year. Note: Round your answers to 2 decimal places. Required C Forward Rate % % Prov 12 of 12 NextGive typing answer with explanation and conclusion A 3-month zero-coupon bond is selling for $99.7 and a 10-year zero-coupon bond is selling for $55.7. Both bonds have a face value of $100. What's the 10-year - 3-month spread in their yields? Answer in percent, rounded to one decimal place.Market Price What is the market price of a $1,000, 5 percent bond paying a semiannual coupon if comparable market interest rates rise to 12 percent and the bond matures in 14 years? Round your answer to the nearest dollar. (Hint: Use Appendix A-2 and Appendix A-4.) Round Present Value of a Single Amount and Present Value of a Series of Equal Amounts in intermediate calculations to four decimal places. $
- Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place 32. The market price of a $1000 par value, semi-annual payment bond is $956.76. If this bond has 27 yearsremaining to maturity and a yield to maturity of 7.30%, what is the bond’s annual coupon rate? (Record youranswer rounded to 2 decimal places; for example, record 0.1493824 = 14.93824% as 12.94).33. The market price of a $1000 par value, quarterly (i.e., 4 times per year)v payment bond is $928.39. If thebond has 21 years to maturity and an annual coupon rate of 9.20%, what is the bond’s yield-to-maturity?(Record your answer rounded to 2 decimal places; for example, record 0.1493824 = 14.93824% as 12.94).Bond Valuation-Semiannual Interest: Calculate the value of each of the bonds shown in the following table, all of which pay interest semiannually. Bond Per Value Coupon Interest Rate Years to Maturity Required stated annaul return A $1,000 9% 9 11% B 500 13 20 12 C 500 12 5 15 The value of bond A is? The value of Bond B is? The value of Bond C is? Remember to round all answers to the nearest cent.Consider two bonds, a 3-year bond paying an annual coupon of 6.80% and a 10-year bond also with an annual coupon of 6.80%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 11%. a. What is the new price of the 3-year bonds? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Bond price b. What is the new price of the 10-year bonds? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Bond price c. Which bonds are more sensitive to a change in interest rates? O Long-term bonds O Short-term bonds
- Consider the following $1,000 par value zero-coupon bonds: Years until Yield to Maturity Maturity Bond A 1 6.25% B 2 7.25 C 3 7.75 D 4 8.25 Required: a. According to the expectations hypothesis, what is the market's expectation of the one-year interest rate three years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Interest rate 9.76 % b. What are the expected values of next year's yields on bonds with maturities of (a) 1 year; (b) 2 years; (c) 3 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Maturity (years) YTM 1 8.26% 2 % 3 %Give typing answer with explanation and conclusion Consider two Bonds with $1,000 face value: 10-year and 30-year maturity. Both Bonds offer 10% annual coupon, paid once a year. Assume that interest rates, hence YTM (Yield to Maturity) changed from 4% to 5%. How much will be the percentage change in the 30-year Bond price? Enter your answer in the following format: + or - 0.1234 Hint: Answer is between -0.1175 and -0.1465Suppose that you buy a two-year 7.3% bond at its face value. a-1. What will be your total nominal return over the two years if inflation is 2.3% in the first year and 4.3% in the second? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Nominal return a-2. What will be your real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Real return % % Real return Nominal return b. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 1%