1. A zero coupon bond is selling for $476. The bond has a face value of $1,000 and matures in 8 years. Your friend asks you if he should buy the bond. He tells you his required return is 9 percent. Would you recommend he buy the bond or not? Explain your answer.
Q: Find out change in stock if closing stock is $60,000 and opening stock is $34,000?
A: According to question we are given closing stocks =$60,000 Opening stock=$34,000 we have to…
Q: Your financial adviser recommends buying a 10-year bond with a face value of $1,000 and an annual…
A: We have Face value of the coupon bond FV =$1000 annual coupon payment (C) =$55 Year of maturity (n)…
Q: 10. The bond has a 30-year maturity, an 8% coupon, and sells at an initial yield to maturity of 8%.…
A: bond's yield is the return to an investor from the bond's coupon (interest) payments. here we…
Q: d coupon of 8% can bé bought at a market price (P) c nat is the yield on the bond (expressed as a…
A: Coupons are regularly depicted as far as the "coupon rate", which is determined by adding the amount…
Q: What's the value to you of a $1,000 face- value bond with an 8% coupon rate when your required rate…
A: A bond is an instrument being issuer to the holders of indebtedness of the bond.
Q: ______________ is a method of measuring the value of a section of the bond
A: In economic, bond market is referred to the place where exchange of bonds take place.
Q: ate paid on similar corporate bonds has decreased to a current rate of 6%/yr/semi (this would be i –…
A: The market value represents the value of a company according to the stock market. It is the price an…
Q: Why is using home equity a risky way to make purchases that do not add to your assets? It's not…
A: Home equity loans make it easier for homeowners to borrow money from equity at home. However, equity…
Q: What type of bond is issued by state and local governments? Is there any risk that state and local…
A: An investor issues a bond to a borrower, such as a company or the government.The funds are used to…
Q: You purchased an annual interest coupon bond one year ago that had nine years remaining to maturity…
A: Number of years of maturity = 8Coupon = 10%*1000 = 100YTM = 8%
Q: A bond has two years to mature. It makes a coupon payment of $100 after one year and both a coupon…
A: The effective yield is the return on a bond that has its interest payments (or coupons) reinvested…
Q: 1. Differentiate inside and outside view in investing. Give a scenario where they are usually…
A: Before investing, investors look up certain possibilities regarding what their investment can yield…
Q: Value a perpetuity that pays £ 2,700 starting in October 2024. Long term rates are 8.3%. The…
A: Value of perpetuity = Payment / Long term rates = 2700/8.3% = 32530.12
Q: The coupon bond pays a coupon of 5% per year, paid semi-annually. It has 3 years to maturity. If the…
A: Yield to Maturity: Yield to maturity (YTM) is the annualized rate of return that an investor can…
Q: Suppose you invested $94 in the Ishares High Yield Fund (HYG) a month ago. It paid a dividend of…
A: Calculation of dividend yield: Dividend = 0.50, stock price = $95 =0.50/95 =0.52%
Q: You decide to purchase a house and need a $160, 000 mortgage. You take out a loan from the bank that…
A: The formula used is: m=p×r1+rn1+rn-1 where m is the monthly payment p is total mortgage amount r is…
Q: Which is the better investment, a fund that pays 5% compounded annually or one that pays 4.8%…
A: Discretely compounded interest is determined and added to the head at explicit spans (e.g., every…
Q: Assume a bond with a remaining maturity of 3 years a. If the face value is $10,000 and coupon…
A: Given Face value of coupon bond FV =$10000 Coupon payment (C)= $500 per year yield to maturity…
Q: If the interest rate is zero, then $100 to be paid in10 years has a present value that isa. less…
A: The present value refers to the today’s value of the future amount that adjusted with the existing…
Q: 1. Consider a coupon bond that has a $1,000 par value and a coupon rate of 9%. The bond is currently…
A:
Q: A coupon bond has two years to maturity, a face value of $1000 and a coupon rate of 2%. The yield to…
A: Given, Par value of bond =$1000 Number of years to maturity = 2 Annual coupon of bond = 2% *1,000…
Q: A $10,000 bond with a coupon rate of 1% and a yield of 2% will pay a yearly interest amount of:
A: Given the bond price = $10000 Coupon rate = 1% Yield = 2%
Q: Fund A has a front-end load of 5.75%. You are considering an investment of $30,000. How much will…
A: front-end load rate = 5.75% Investment = 30,000
Q: what are zero-coupon bonds also called?
A: Answer: A zero-coupon bond is a bond that is sold at a discounted value or lesser value than par. It…
Q: if the market interest rate is equal to 5%, should you buy for 900 euros a coupon zero risk free…
A: We are going to find the terminal value in both alternatives to answer this question.
Q: What is the price of a two year bond with a 9% annual coupon and a yield to maturity of 8%?
A: Given Information : Annual Coupon (C) = 9% Yield to maturity (YTM) = 8% Assume Face value of Bond =…
Q: Which of the following refers to the interest payments of the bond? * A. Coupon Bond B. Present…
A: Interest is defined as the payment made by the borrower to the lender for loans. It can be referred…
Q: 43) Which is a term that would be included in a bond indenture? a) Interest rate b) Dividend c)…
A: Since you have asked multiple questions, we will solve the first question (Q#43) for you. If you…
Q: f you pay $1000 for a $1000 bond that pays annual “coupon interest” equal to 5% and matures in 3…
A: Given bond coupon rate = 5 % Bond face value = 1000 $ Current market value = 1000 $ Time = 3 years
Q: How would I figure this out. The equation I’ve been using for bonds is Y=ai/p Ai for annual interest…
A: One-year interest rate (R) = [C + (F - P) / N] / [(F + P) / 2], where C: Annual coupon = $1,000 x 5%…
Q: Which of the following $1,000 face-value securities has the highest yield to maturity? A) a 5…
A: option A is correct answer
Q: Which of the following bonds pays only the principal amount to the bondholders at the maturity. a.…
A: Bonds: A bond is an instrument or security in the form of fixed investment that represents the…
Q: QUESTION 1 a) Under what conditions that a discount bond has a negative nominal interest rate? Is it…
A: Nominal interest rate is given as the sum of real interest rate and inflation rate. The Nominal…
Q: (Present Value of an Annuity) Why is $10,000 a close approximation of the price of an annuity that…
A: Present Value of an Annuity) Why is $10,000 a close approximation of the price of an annuity that…
Q: An 8 percent coupon bond has a maturity of 6 years. The Bond has a face value of 2,000 and it is…
A: Bond is the financial instrument that firms or organizations raise for selling it to the investors…
Q: 26. If the interest rate is zero, then $1,000 to be paid in 10 years has a present discount value…
A: With Discount or interest rate equals to zero, the present value of the 1000 $ will be same as…
Q: 4. Working with Numbers and Graphs Q4 The face value of a bond is $6,000, and the annual coupon…
A: The coupon rate is the yearly yield on a bond that an investor may anticipate to earn while keeping…
Q: A bond that is currently selling at $1,000 offers to pay $50 annually. What is the percentage rate…
A: Given information - Bond price = $1000 Return = $50
Q: Calculate what you would actually be willing to pay for this bond.
A: The current value of a future sum of money at a given rate of return is called the present value.…
Q: Calculate the current yield on a bond that has an annual interest payment of $200 and a resale price…
A: Bond: It is an instrument of indebtedness of the bond issuer to the bondholder.
Q: A two-year coupon bond has a face value of $1,000, a coupon rate of 5% and a yield to maturity of…
A: Given: Face value (F) = $1000 Coupon rate = 5% Hence, coupon payment = 5/100 × 1000 = $50 Yield to…
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- Suppose you are committed to owning a $343,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of 12.9 percent and you want to buy the car in 9 years (on the day you turn 30), how much must you invest today?Problem 3 An investor bought a discount bond with face value of $1,000 at the price of $870. The bond matures in three years. What is the rate of return? Problem 6 You lend $1,000 today. The borrower promises to return $1,500 in 8 years from now. What is the yield to maturity of this loan?Beam Inc. Bond's are trading today for a price of 768.54. the bond pays annual coupons with a coupon rate of 2% and the next coupon is due in one year. The bond has a yield to maturity of 4.75%. how many years are there until the bond matures?
- 14. Tim has a $5000 bond with a 4.6% coupon. Tim purchased this bond for $5195. What is the yield of this new bond? 44% 4.6% 4.8% 4.2%At 5.2 percent interest, how long does it take to double your money?A 12 percent semiannual coupon bond matures in 9 years. The bond has a face value of $1,000 and a current yield (CY) of 11.62 percent. What is the bond’s yield to maturity (YTM)? how would I calculate in a BA II PLUS FINANCIAL CALCULATOR. 4
- 11. The face value of a bond is $10,000, and the annual coupon payment is $850. What is the coupon rate?Consider a coupon bond that has a $1.000 par value and a coupon rate of 9%. The bond is currently selling for $1,150 and has 9 years to maturity. What is the bond's yield to maturity?Your bank account pays an interest rate of 8 percent. You are considering buying a share of stock in XYZ Corporation for $110. After 1, 2, and 3 years, it will pay adividend of $5. You expect to sell the stock after 3 years for $120. Is XYZ a good investment? Support your answer with calculations.
- A man invests his savings in two accounts, one paying 6 percent and the other paying 10 percent simple interest per year. He puts twice as much in the lower-yielding account because it is less risky. His annual interest is 6534 dollars. How much did he invest at each rate? Your answer is total in the account paying 6 percent interest is total in the account paying 10 percent interest isK A twenty year bond with a $1000 face value was issued with a yield to maturity of 4.5% and pays coupons semiannually. After ten years, the yield to maturity is still 4.5% and the clean price of the bond is $960.09. After three more months go by, what would you expect the dirty price to be? OA. $1,000.09 OB. $970.09 OC. $980.09 O D. Cannot be determined from information given.You have $10,000 to invest. Your bank offers the following 10 year CD's. Account 1 offers 6.85% simple interest. Account 2 offers 6.57% compounded annually. a. How much money will you have at the end of 10 years if Account 1 is chosen? s b. How much money will you have at the end of 10 years if Account 2 is chosen?S Account is the better choice.