Suppose that you have purchased a EUR bond issued by Deutsche Bank. At the time of the purchase, the price of the bond was EUR 98.5M. The bond matures in 3 years, pays a fixed 5% coupon bond, and has a face value of EUR 100M. That is the expected YTM in USD if the spot rate is USD 1/EUR, F1 is USD 1.12/EUR, F2 is USD 1.15/EUR, F3 is USD 1.18/EUR? Please enter your answer as % -- e.g. if your answer is 2.34% type in 2.34.

Suppose that you have purchased a EUR bond issued by Deutsche Bank. At the time of the purchase, the price of the bond was EUR 98.5M. The bond matures in 3 years, pays a fixed 5% coupon bond, and has a face value of EUR 100M. That is the expected YTM in USD if the spot rate is USD 1/EUR, F1 is USD 1.12/EUR, F2 is USD 1.15/EUR, F3 is USD 1.18/EUR? Please enter your answer as % -- e.g. if your answer is 2.34% type in 2.34.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

See similar textbooks

Similar questions

A bond with a nominal of EUR 400 000 000 and a maturity of 2 years has acoupon of 4.24%. The price of the bond is 96.5%. What is the coupon expressedin money (euro) in the second year? Calculate the yield of the bond (or writedown the equation with all number filled in). Can you use this yield to calculatethe current value (PV) of the coupon in year 2? Explain your answer.do not solve in excel. solve using YTM and spot rates Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Suppose that the prices of zero-coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000. Maturity (Years) Price 1 $ 998.78 2 880.89 3 815.92 4 752.40 5 685.70 a. Calculate the forward rate of interest for each year. (Round your answers to 2 decimal places.) b. How could you construct a 1-year forward loan beginning in year 3? (Round your Rate of synthetic loan answer to 2 decimal places.) c. How could you construct a 1-year forward loan beginning in year 4? (Round your answers to 2 decimal places.)
In November 2016 you purchase a 4 year US Government bond. The bond has an annual coupon rate of 6.25%, paid semi-annually. If investors demand a 0.950% semiannual return, what is the price of the bond? Select one: a. 55000 b. 1210 c. 430 d. 70
What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years and an annual interest payment of 25%, when the desired rate of return is 25%? a) 18000b) 15000c) 12000d) 16000e) 24000
Assume that you wish to purchase a 30-year bond that has a maturity value of P1,000 and a coupon interest rate of 9.5%, paid semiannually. If you require a 6.75% rate of return on this investment, what is the maximum price that you should be willing to pay for this bond? O P675 O P1,450 O P1.352 O P1,111
1.If you buy a 5-week T-bill with a face value of Tk.1,500 for $990, what is the bond equivalent yield, assuming it is not a leap year?
Compute the price of the following bonds: Bond A: Coupon bond, 4% coupon paid semi-annually, with maturity of 14 years. Bond B: Zero coupon bond with maturity of 7 years. Bond C: Coupon bond, 7.75% coupon paid yearly, with maturity 10 years. Assume that all 3 bonds have the same nominal: 1000 euro. Your required rate of return is the same for each bond and equal to 6%.
Bond X is a premium bon making annual payments. The bond pays 8% coupon, has YTM of 6% and has 13 years to maturity. Bond Y is a discount bond making annual payments. This bond pays a 6% coupon, has an YTM of 8% and also has 13 years to maturity. The nominal value of both bonds is £1,000. What are the prices of these bonds today? If interest rates remain unchanged, what do you expect the prices of these bonds to be in one year? In three years? In eight years? In twelve, thirteen years? What is going on here? Illustrate your answers by graphing bond prices versus time to maturity.
Answer the following situation show your Complete Solution. Show the formulas. a. A bond with face value of Php 1,000 is selling at Php 950. The maturity of the bond is one year . How much is its gain ? b. A bond with Php5,000 face value pays 10 % coupon rate semi - annually . If the maturity of the bond is 2 years , how much is the coupon paid semi - annually ? Find the total coupon during the life of the bond . Answers ( I already provided the answers just please show the solutions with correct formulas): a. Php 50 is the amount of gain. b. Php 500 is the among of semi-annual coupon. Php 2 000 is the total coupon since there are 4 periods in two years.
What is the price of a bond with the following information? It is 1.5 years until expiration. The coupon rate is 7 percent and coupon payments are made once per year. The market rate of return is 5.9 percent. The bond has a face value of 2000 SEK. Tips Draw a time axis so that you do not make any mistakes with the discounting. Don't look at the cash flows as an annuity, but as two separate cash flows. There is always a coupon payment when the bond matures, how long is it then until the next coupon payment? (Answers are rounded to integers) a) 265 b) 2100 c) 1971 d) 1990 e) 2216
What is the approximate price of a bond that matures in two years (T= 2), with a face value of $1000 (F= $1000), and an annual coupon payment of $50 (C = $50), if the interest rate is 6 percent? $1056.67 $1100.00 $876.33 $981.67
A bond has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. a) If the bond has a yeild to maturity of 9% 1 year from now, what will its price be at that time? b) What will be the rate of return on the bond? c) Now assume that interest is paid semannually. What will be the rate of return on the bond? d) If the inflation rate during the year is 3% what is the real rate of return on the bond?