A $1,000 par value bond with a 6% coupon rate is currently selling for 90. This bond has 15 years remaining before it matures. If you purchase this bond today and hold it to maturity, what YTM will you earn?
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A $1,000 par
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- A three-year bond with $1,000 face value and 10% coupon rate is sold for $1,000 today. If one year later the market interest rate increases to 15%, then this bond will have a market price of _______ next year.Today, you want to sell a $1,000 face value zero coupon bond you currently own. The bond matures in 6.5 years. How much will you receive for your bond if the market yield to maturity is currently 7.95 percent compound semi-annually?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 calculations
- A bond has a face value of $1,000. If this bond will mature in 5 years, pays interest semiannually, and has a coupon rate of 6%, what is the yield to maturity on this bond if it is currently selling for $720? (Show your work to receive full credit)Today is 31 Dec 2022, and you see a 5 year bond with 5% annual coupon maturing on 31 Dec 2027, quoted at a price of 95.5/95.6. What is the Dollar Value of 1 bps move in interest rates (DV01) for $10 million investment in this bond?Consider a $1,000 par value bond with a 7% annual coupon. There are 20 years remaining until maturity. You have expectations that in 5 years the YTM on a 15-year bond with similar risk will be 7.5%. You plan to purchase the bond now and hold it for 5 years. Your required return on this bond is 7.17%. How much would you be willing to pay for this bond today? (hint: find the expected bond value in 5 years) A) $962 B) $970 C) $924 D) $875 E) $859
- You 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 zera coupon bond with promised payment of $100 to be paid in 5 years has price equal to$80. What is the YTM?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?
- A bond with a face value of $1,000 and a 10% coupon rate is going to mature in 15 years. Assuming that the coupon is paid annually, determine the value of this bond if your cost of debt is 13%. Now, there is a zero coupon bond with similar risk and same maturity selling for $180 currently. The face value of this zero coupon bond is also $1,000. Assume that the market price of the bond in part a is $820, which bond (the coupon bond in part a and zero coupon bond in part b) should you invest in, or both, or none of them ? Explain briefly whether a zero-coupon bond will be selling (i) at a premium, and (ii) at par. How are the cash flows of a zero-coupon bond different from those of a coupon bond ? Explain the implication(s) of the difference(s) with respect to their effective maturity.A 4 year maturity bond with a 14% coupon rate can bought for $1200.i- What is the yield to maturity if the coupon is paid annually? ii- What if it is paid semiannually?On January 1, 2024 you buy a 30-year Treasury bond for $930 with exactly 30 years until maturity. This $1000 par value bond has a coupon rate of 5% and makes semiannual coupon payments. What is the current yield on this bond? a. 2.74% b. 5.38% c. 6.54% d. 5.47% e. 3.32%