2 4. The yield to maturity of a 5-year zero coupon bond, with a par value of $1,000 and a market price of $866.81, is5. A) 9%6. B) 0%7. C) 1%8. D) 2%5. The modified duration of a par value bond with a coupon rate of 3.5% and a remaining time to maturity of 3 yearsis6. A) 677. B) 728. C) 759. D) 80

Par value = $ 1000 Price = $ 866.81 Period = 5 Years

Answered: 4. The yield to maturity of a 5-year…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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find the coupon rate of a bond that is sold at 950 $ and has a par value with $1,000, 5 years to maturity, and a discount rate of 6%? O a. 4.7%. b. 3.2%. O c. 5.3%. O d. 6.2%.
8) Consider a six-year annual bond paying a 7% coupon, with a yield to maturity of 5.0%. What is the duration of the bond? A) 4.925 B) 5.148 C) 5.236 D) 5.687
You purchase a zero coupon bond with 12 years to maturity and a yield to maturity of 4.93 percent. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding. a.$27.12 b.$26.89 c.$27.82 d.$24.34 e.$26.71
An n-year bond with semi-annual coupon payments has the following characteristics: • Par value is $100. • Redemption value is 105% of par. • Semi-annual coupon rate is r. • Semi-annual yield rate is i. • Price of the bond is $64.34. You are also given: (1+ i)-" = 0.3878 Calculate (A) 0.57 (B) 0.87 (C) 1.16 (D) 1.46 (E) 1.75
Consider a 5-year 9% coupon bond with yield of 8% and par value of $100. What is this bond's approximate duration assuming a 20-basis-point change in yield? a.) 3.876 b.) 3.995 c.) 3.765 d.) 4.034
Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates. А. -5.4% B. -6.4% С. -8.6% D. 4.8% QUESTION 15 Using the information in Question 14 above, estimate the price of the bond for a 200 basis-point increase in interest rates. А. $936 В. $1002 C. $964 D. $1012
Assume the following: Bond A coupon = 6%, maturity = 5 years, yield to maturity = 6% Bond B coupon = 0%, maturity = 5 years, yield to maturity = 6% Bond C coupon = 6%, maturity = 5 years, yield to maturity = 6.5% Which of the following statements concerning duration is correct? Group of answer choices A. Duration of C<Duration of A=Duration of B. B. Duration of A>Duration of B>Duration of C. C. Duration of C < Duration of A < Duration of B. D. Duration of A< Duration of B<Duration of C.
Please provide complete step by step asnwer: 12) Consider a four-year, zero-coupon bond, with a yield to maturity of 7.2%. What is the duration of the bond? A) 4.000 B) 3.785 C) 3.614 D) 3.548
24. A P1M 6% annual coupon bond has been issued at a price of 95. Its maturity is 4 years. Answer the following: a. Compute the YTM for the bond. b. Compute the Macaulay Duration for the bond using the tabular form. C. d. e. f. g. h. Compute the Modified duration. If the YTM goes to 6%, what is the new bond price? Using the YTM in letter a, what is the convexity of the bond? Assuming a 200 BP decline in YTM, what is the duration change? (use the modified duration in no. c) What is the convexity change? What is the combined effect of the duration change and convexity change? What will be the new price base on no. h? 25. There is a 25-year bond issued by the Republic of the Philippines last May 1, 2015 with a coupon of 8% paid out every May 1 and November 1. Answer the following questions: 1. Assuming that you wish to invest in this bond on May 1, 2020, when the prevailing interest rate is 9%, what is the purchase price for this bond? 2. What is the total investment for this bond if you…
A three-year bond has an 8 percent coupon rate and a $1,000 face value. If the yield to maturity on the bond is 10 percent, calculate the price of the bond assuming that the bond makes semiannual coupon payments. Question 8Select one: A. $1,057.54 B. $949.24 C. $1,000.00 D. $857.
4) A 10 year bond with $50, 000 face value has semiannual coupon rate 4% and semiannual yield rate 2%. Fill out the following amortization table. Principle Outstanding t Payment Interest герaid Balance 1 2 3 12
6. Yield to Maturity Each of the bonds shown below pays interest annually. Bond Par Value Coupon Years to Maturity Current Value A 12% 15 B 10% 10 C $1000 13% 10 D $1000 8% 4 a) Calculate the yield to maturity (YTM) for each bond. $1000 $500 $850 $560 $1200 $900 b) What relationship exists between the coupon rate and yield to maturity and the par value and market value of a bond? Explain.

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