Calculate the invoice price for a T-Bond futures contract with quoted price of 97-16 where the conversion factor of the cheapest- to-deliver bond is .9900 and the accrued interest on the settlement date will be $800.
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- Assume you have treasury note .The contract price is 124 and you can deliver either bond A with conversion of 0.9 and price of 110 or a bond with conversion of 0.7 and price is 100. What will be the loss gain of the buyer? ( 1.77 -1.77 9.3 -9.3Suppose a sixy ear bond is purchased for $4800. The face value of the bond when it matures is $7032. Find the APR.You submit a noncompetitive bid in Dec. 2020 to purchase a 28-day RM1,000 Treasury bill, and you find that you are buying the bond for RM999.88722. What are the: a) discount rate % b) investment rate %?
- d is listed in & newspaper at a bid of 105.4844. This quote should be Interpreted to mean: e bond will pay semiannual interest payments of $105.4844 per $1,000 of face value. can 'euyuwt bond at a price equal to 105.4844 percent of face value. sellthat bond at a price equal to 1054844 percent of face value. il pay annual interest payments of $105 4844 per $1000 of face value. s willng to sell that bond for a price equal to 105.4844 percent of par.1. Suppose that you purchase the T-bill maturing on September 15, 2020, for 9,991.362. The T-billmatures 122 days after the settlement date and has a face value of 10,000. The T-bill’s discountyield is _________.2. Based from the above information, the T-bill’s bond equivalent is __________. The EAR on the Tbill is ___________.3. The discount yield on the T-bill maturing on November 3, 2020 or 171 days from settlement dateis 0.328 percent. The price of the T-bill is ___________.4. The overnight fed funds rate was 0.41 percent. The conversion of the fed funds rate to a bondequivalent rate is ___________. The EAR on the fed funds is ___________.5. Assume that a bank enters a repurchase agreement in which it agrees to buy fed funds at a priceof 15,000,000 with the promise to sell these funds back at a price of P15,000,926.345 after 12days. The yield on this repo to the bank is ___________.6. An investor purchases a 45-day commercial paper with a par value of 500,000 for a price…Considera put contract onaT bondwith an exercise price of $101 16/32. The contract represents $1,000,000 of bond principal and had a premium of $750. The actual T bond price falls to $95 16/32 at expiration. What is the gain or loss on the position?
- Calculate YTC using a financial calculator by entering the number of payment periods until call for N, the price of the bond for PV, the interest payments for PMT, and the call price for FV. Then you can solve for 1/YR YTC. Again, remember you need to make the appropriate adjustments for a semiannual bond and realize that the calculated 1/YR is on a periodic basis so you will need to multiply the rate by 2 to obtain the annual rate. In addition, you need to make sure that the signs for PMT and FV are identical and the opposite sign is used for PV; otherwise, your answer will be incorrect. A company is more likely to call its bonds if they are able to replace their current high-coupon debt with less expensive financing. A bond is more likely to be called if its price is above par-because this means that the going market interest rate is less than its coupon rate. Quantitative Problem: Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 8.4%…Compute the Macaulay duration under the following conditions: a. A bond with a four-year term to maturity, a 10 percent coupon (annual payments), and a market yield of 8 percent. b. A bond with a four-year term to maturity, a 10 percent coupon (annual payments), and a market yield of 12 percent. c. Compare your answers to parts (a) and (b), and discuss the implications of this for classical immunization.Unlike the coupon interest rate, which is fixed, a bond's yield varies from day to day depending on market conditions. To be most useful, it should give us an estimate of the rate of return an investor would earn if that investor purchased the bond today and held it for its remaining life. There are three different yield calculations: Current yield, yield to maturity, and yield to call. A bond's current yield is calculated as the annual interest payment divided by the current price. Unlike the yield to maturity or the yield to call, it does not represent the actual return that investors should expect because it does not account for the capital gain or loss that will be realized if the bond is held until it matures or is called. This yield was popular before calculators and computers came along because it was easy to calculate; however, because it can be misleading, the yield to maturity and yield to call are more relevant. The yield to maturity (YTM) is the rate of return earned on a…
- How much will a $49,200 EE savings bond cost when you initially purchase it? Assuming the bond earns 2.69 percent annually, approximately how long will it take for the bond to reach its stated face value? When you initially purchase it, the EE saving bond will cost $ 24,600. (Round to the nearest dollar.) Assuming the bond earns 2.69 percent annually, the length of time it will take for the bond to reach its stated face value is years. (Round to one decimal place.)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?Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 percent, the future value of the bond (the amount the bond pays in one year) is * P1,560.00 P1,540.00 P1,440.00 O P1,442.31