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- Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for 1,135.90, producing a nominal yield to maturity of 8%. However, the bond can be called after 5 years for a price of 1,050. (1) What is the bonds nominal yield to call (YTC)? (2) If you bought this bond, do you think you would be more likely to earn the YTM or the YTC? Why?What is the market price of a redeemable (at par) bond, with a maturity date in 4 years’ time, and a coupon rate of 10%, if current cost of debt, Kd (return required or yield) is 8%?What is the fair price for a bond with a 5.5% annual coupon and 8 years until maturity if the yield is 9%?
- You are looking at a 18-year zero-coupon bond that has a yield to maturity of 5.0% . What is the value of the bond? Assume semi-annual compounding. leConsider a bond with a 10% coupon and yield to maturity = 8%. If the bond’s yield to maturity remains constant, then in one year, will the bond price be higher, lower, or unchanged? Why?What is the price of a bond with a coupon rate of 5.20% and semi-annual payments, if the yield-to-maturity is 10.20% and the bond matures in 20 years? Assume a par value of $1,000.
- Consider a 30-year bond with a 10% coupon rate (annual payments) and a $100 face va the initial price of this bond if it has a 5% yield to maturity? If the yield to maturity is un will the price be immediately before and after the first coupon is paid?What is the Macaulay duration of a semi-annual bond with a coupon rate of 7 percent, five years to maturity, and a current price of $959? What is the modified duration? Duration is __. years. Modified duration is __ years.What is the duration of the following bond:$1,000par value,6%annual coupon, 4 years to maturity, and yield to maturity of6.5%? You will need your answer for the next question. In the prior question, what is the present value of the bond?
- What is the value of a 6%, five year bond with annual coupons and face value equal to $1,000, if the current yield to maturity is 6%?How is a bond’s value determined? What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required return is 10%?A bond with 5 years to maturity, a face value of $2,000 and a coupon rate of 8.0% is selling for $1750. What is its yield to maturity? If the yield changes to 8.0%, what will be the new price of the bond? (Assume annual coupon payments.)