A Bond par value sh. 100 coupon rate 7% investment period 10 years a) Determine the value of the bonds. Assume an interest rate of 15% b) If the rates increase by 1%, what is the bond elasticity? c) If the rates decrease by 2%, what Is the bond elasticity? Kindly use a financial calculator. Thank you.
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a) Determine the value of the bonds. Assume an interest rate of 15%
b) If the rates increase by 1%, what is the bond elasticity?
c) If the rates decrease by 2%, what Is the bond elasticity?
Kindly use a financial calculator. Thank you.
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- Use the following information to answer the questions. Bond A Bond B Face Value 1000 1000 Coupon rate 10% 8% Coupons paid out Semi-annually Quarterly Years to maturity 4 4 Bond price 800 ? Suppose bond A and B have the same YTM. What is the yield to maturity of bond A? What is the price of bond B? What is the current yield of bond B? What is the EAR (effective annual rate) of these two bonds?A Bond par value sh. 100 coupon rate 7% investment period 10 years a) Determine the value of the bonds. Assume an interest rate of 15% b) If the rates increase by 1%, what is the bond elasticity? c) If the rates decrease by 2%, what Is the bond elasticity? Kindly use PVIFA table . Thank you.Hi can teach me how to solve the question step by step? TQ 2. suppose that the market interest rate is 5%. calculate the present value of the following. a. A coupon bond with an annual coupon payment of $135 and a face value of $1500 that matures in five years. b. A discount bond with a face value of $5000 that matures in one year. c. A fixed payment loan with annual payments of $163 that matures in three years.
- K Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): 0 2 5 Period $19.53 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value? Cash Flows View an example Get more help. ★ a. What is the maturity of the bond (in years)? The maturity is years. (Round to the nearest integer.) A 6 1 MacBook Pro & 7 $19.53 * 8 9 C 59 $19.53 60 $19.53+$1,000 Clear all BUB 0 {Use of a financial calculator or Excel (functions PRICE and YIELD will be helpful) will be helpful to calculate the following problems. Show your work, include your calculator entries (i.e. N, PV, PMT, FV, IM, and/or Excel formulas where applicable. 1. Suppose there is a bond with a par value of $1,000 that matures in 6 years. Coupon payments are made annually. The coupon rate is 9%. It has a 12% yield to maturity. The annual coupon payments = $ b. The price of the bond today (present value) = $Refer to Table 10-1, assume interest rates in the market (yield to maturity) are 12 percent for 20 years on a bond paying 10 percent. a. What is the price of the bond? b. Assume 15 years have passed and interest rates in the market have gone down to 12 percent. Now, using Table 10-2 for 5 years, what is the price of the bond? c. What would your percentage return be if you bought the bonds when interest rates in the market were 12 percent for 20 years and sold them 15 years later when interest rates were 12 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
- 2. A bond has a par value of $100, a coupon rate of 10.75% and matures in 5 years. If interest is paid quarterly and the required rate of return is 10%, what is the bond’s value? Please provide solutions to your answers.Question 1 : Consider a coupon bond with an 8% annual coupon rate, a 10% interest rate, and a $1000 face value. The bond will mature in 4 years. What is the duration of this bond? Duration is defined as a weighted average of the maturities of the cash payments. Suppose the weight assigned to the maturity of 1 year is W. Show your work. No work, no credit A: Duration 2.28 and W=7.77% B: Duration=3.56 and W-20.5% C. Duration 3.56 and W-23.1% D. Duration=3,56 and W-7.77%Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the rate of return of the bond? 10% 0% -10% 20%
- Suppose that you buy a two-year 8% bond at its face value. a. What will be your total nominal return over the two years if inflation is 3% in the first year and 5% in the second? b. What will be your total real return?You will receive $100 from a savings bond in 3 years. The nominal interest rate is 8%. a. What is the present value of the proceeds from the bond? b. If the inflation rate over the next few years is expected to be 3%, what will the real value of the $100 payoff be in terms of today's dollars? C. What is the real interest rate? d. Show that the real payoff from the bond [from part (b)] discounted at the real interest rate [from part (c)] gives the same present value for the bond as you found in part (a).Use the table below for the questions that follow, and assume semi-annual interest payments. Bond A B Coupon Rate 6% Zero coupon Yield 4.5% 6.25% Maturity 3 years 7 years Based on your answer for the duration of Bond B, what is the duration predicted dollar price change for a 1% increase in interest rates? Remember, positive and negative signs matter!