Your client is considering the purchase of a bond that is currently selling for $1058.15. The client wants to know what annual rate of return can they expect to earn on the bond. The bond has 27 years to maturity, pays a coupon rate of 7.8% (payments made semi-annually), and a face value of $1000 (Round to 100th of a percent and enter your answer as a percentage, e.g. 12:34 for 12.34%) Answer Check
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- You are buying a bond at a clean price of $1,140. The bond has a face valueof $1,000, an 8 percent coupon, and pays interest semiannually. The nextcoupon payment is one month from now. What is the dirty price of this bond? Please show how you arrive to this answer.Your client is considering the purchase of a bond that is currently selling for $1112.09. The client wants to know what annual rate of return can they expect to earn on the bond. The bond has 22 years to maturity, pays a coupon rate of 5.5% (payments made semi-annually), and a face value of $1000. (Round to 100th of a percent and enter your answer as a percentage, e.g., 12.34 for 12.34%)Your broker offers to sell for $1,071 a AAA-rated bond with a coupon rate of 6 percent and a maturity of nine years. Given that the interest rate on comparable debt is 5 percent, calculate the bond's price. Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ Is your broker fairly pricing the bond? , so the bond be purchased.
- 1)Your broker offers to sell for $1,157 a AAA-rated bond with a coupon rate of 7 percent and a maturity of six years. Given that the interest rate on comparable debt is 4 percent, calculate the bond's price. Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. 2)Is your broker fairly pricing the bond? 3)the bond should or should not be purchased?Your client is considering the purchase of a bond that is currently selling for $1148.18. The client wants to know what annual rate of return can they expect to earn on the bond. The bond has 14 years to maturity, pays a coupon rate of 2.5% (payments made semi- annually), and a face value of $1000. (Round to 100th of a percent and enter your answer as a percentage, e.g., 12.34 for 12.34%) Answer:Your broker offers to sell you a CleenWtr Bond for $1150. The bond has a coupon rate of 3%, semiannual interest payments, and a maturity of 9 years. If the interest rate on comparable debt is 2.0% is your broker fairly pricing the bond? (What is the curent price of the bond)
- The market price of a 10-year bond is 957$, its yield to maturity is 8% per year, and annual coupon payments are equal to 957$. The face value of the bond is $1000. Calculate the present value of the bond. Would you buy it? The answer is to be written in the reasons box. Round your answer to the nearest tenth. Optional: Provide calculation details in the reasons box. Answer: Give your reasonsYour broker offers to sell for $1,060 a AAA-rated bond with a coupon rate of 5 percent and a maturity of seven years. Given that the interest rate on comparable debt is 4 percent, calculate the bond's price. Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. Is your broker fairly pricing the bond? -Select- V so the bond-Select- v be purchased.You purchase a 6%, 20-year annual coupon bond for its face value. You will hold this bond for two years in your portfolio (till you receive coupon payments for both years), after which you will sell it. After two years, the market rate is 7%. How much will your bond sell for? What will be your percentage return? a. $899.41 and 1.94% respectively b. $1,000 and 0% respectively c. $899.41 and -4.06% respectively d. $894.06 and 1.41% respectively
- You want to form a bond portfolio that pays $100 every six months, for the next year. That is, $100 in 0.5 years and $100 in 1 year. To achieve this goal, you will purchase Bonds A and B, which have a face value of $100 and pay semi-annual coupons. The following information is available: Bond A • Coupon rate (APR): 4.3% Maturity: 1 year Bond B • Coupon rate (APR): 9.5% • Maturity: 1 year Calculate the number of units you must buy of Bond B to achieve your goal. Express your answer as a number with two decimals. E.g. If your answer is 102.544, then enter it as 102.54You want to invest in a bond for one year, and are deciding between the following two choices - Bond A and Bond B, both of which have a maturity of 1 year and a par value of $1,000.Bond A is a regular(i.e., nominal- return) with a couponrate of 3% per year, payable semi-annually. The current price of Bond A is $998. Bond B is a real-return bond with a coupon rate of 2% per year, payable annually. The current price of Bond B is $1,000. What is the inflation rate (over the next year) that will make the (nominal) ratesof return of the two choices the same?If a bond is issued at the price of $10,000 per contract and promises a 5.7% interest every year, the contract will be redeemed by the issuer at a discount after 8 years for $9,200. If the market is offering a return of 4.8% for similar risk securities, what would be the price you are ready to offer for this bond?