A bond promises to pay you $7,000.00 in 10 years. If you are able to earn 6 percent on securities of equal risks, what would be the present value of the Bond? (to the nearest dollar)
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A bond promises to pay you $7,000.00 in 10 years. If you are able to earn 6 percent on securities of equal risks, what would be the present
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- A bond with a face value of $11,000 pays interest of 3% per year. This bond will be redeemed at par value at the end of its 13-year life, and the first interest payment is due one year from now. If you want a 10% return rate, what is the highest price that you'd be willing to pay for the bond?"A bond promises to you 7000 in 10 years. If you are able to earn 6 percent on securities of equal risks, what would be the present value of the bond?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?
- You are considering the purchase of a perpetual bond that pays you $174 per year for the foreseeable future. If you require a 5.85% rate of return on this bond investment, what is a fair price for the bond that you would be willing to pay today? To nearest $0.01Consider a bond with a face value of $1,000. The coupon is paid semiannually and the market interest rate (effective annual interest rate) is 8 percent. How much would you pay for the bond if . the coupon rate is 6 percent and the remaining time to maturity is 10 years? the coupon rate is 10 percent and the remaining time to maturity is 15 years?You will be paying $8,600 a year In tultion expenses at the end of the next two years. Bonds currently yleld 7%. Q. What is the present value and duration of your obligation? b. What maturity zero-coupon bond would Immunize your obligation? c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately Increase to 9%. What happens to your net position, that is, to the difference between the value of the bond and that of your tultion obligation? d. What if rates fall Immediately to 5% ? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.) \table[[,,,],[Present value,,,,,],[Duration,,years,,,]]
- Consider a bond with a face value of $1,000. The coupon is paid semiannually and the market interest rate (effective annual interest rate) is 8 percent. How much would you pay for the bond if a. the coupon rate is 6 percent and the remaining time to maturity is 10 years?The amount of the prospective investor pay for a bond if he desires an 13% return on his investment and the bond will return P1,200 per year for 20 years and P40,000 is the redemption cost. Find the price of the bond: (2 decimal places only, rounded off. if whole number, no need to add .00)Consider a bond with a face value of $1,000. The coupon is paid semiannually and the marketinterest rate (effective annual interest rate) is 8 percent. How much would you pay for the bondif a. the coupon rate is 6 percent and the remaining time to maturity is 10 years?b. the coupon rate is 10 percent and the remaining time to maturity is 15 years?
- You purchase a 6%, 20-year annual coupon bond for its face value. You will hold this bond for two years in your portfolio (till you receive coupon payments for both years), after which you will sell it. After two years, the market rate is 7%. How much will your bond sell for? What will be your percentage return? a. $899.41 and 1.94% respectively b. $1,000 and 0% respectively c. $899.41 and -4.06% respectively d. $894.06 and 1.41% respectivelyA bond is currently selling for $1040. It pays the amounts listed in the picture at the ends of the next six years. The yield of the bond is the interest rate that would make the NPV of the bond’s payments equal to the bond’s price. Use Excel’s Goal Seek tool to find the yield of the bond.You will be paying $10,000 a year in tuition expenses at the end of the next two years. Bonds currently yield 8%.a. What is the present value and duration of your obligation?b. What maturity zero-coupon bond would immunize your obligation? c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 9%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation?d. What if rates fall immediately to 7%?