A bond with 9% coupon rate has a yield to maturity of 12%, 28 years to maturity,

Question

A bond with 9% coupon rate has a yield to maturity of 12%, 28 years to maturity, a $1,000 par value, and pays interest semi-annually. What is the amount of each coupon payment? Question 8 options: 1) $45 2) $60 3) $90 4) $120

A semiannual bond with a $1,000 face value has a 9 percent coupon rate of and an 11 percent yield to maturity. If the bond is selling for $892.38, how many years are left to maturity? options: 1) 7.89 years 2) 8.02 years 3) 8.14 years 4) 8.37 years

A three months Treasury bill with $10,000 face value has a discount rate of 1.88% and matures in 90 days. Compute its price? options: 1) $9,953 2) $9,959 3) $9,964 4) $9,976

A zero-coupon Treasury security has 9 years left to maturity and a $1,000 face value. If you are willing to earn 5.5 percent return on the bond, compute the price you are willing to pay for the bond today (Assume semiannual compounding). options: 1) $613.66 2) $623.09 3) $651.11 4) $662.78

One outstanding bond of Barry Dynamics Co., provides a yield to maturity equal to 10.82 percent. If the inflation rate 2.8 percent. What is the actual real rate of return on this bond? Question 14 options: 1) 6.93 percent 2) 7. 58 percent 3) 7.80 percent 4) 8.07 percent

A bond has 9% coupon rate, a $1,000 face value, pays interest semi-annually, matures in 12 years, and has a yield to maturity of 7.75%. What is the current market price of the bond? options: 1) $989.73 2) $1,057.86 3) $1,062.49 4) $1,096.52

Best sell Inc., has $1,000 face value bonds outstanding. These bonds pay interest semiannually, mature in 5 years, and have a 6 percent coupon. The current price is quoted at $1,010.00. What is the yield to maturity? options: 1) 5.62 percent 2) 5.77 percent 3) 5.84 percent 4) 6.13 percent

Explanation / Answer

Ans 1) Coupon payment = (9% of 1000)/2 = $45

Ans 2) Bond price = Coupon * ( 1 - (1+r/2)^(-2*n))/r/2 + face value/(1+r/2)^2n

892.38 = 45 * (1 - 1.055^(-2n))/.055 + 1000/(1.055^2n)

n = 8.37 years

Ans 3) Price of three month T bill = 10000/( 1 + .0188*90/360)

= $9953

Ans 4) Price of zero coupon bond = 1000/(1 + .055/2)^(9*2) = $613.66

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.