Answer problem 8.30(c) Crane Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.215 percent and ayield to maturity of 6.0 percent. Assume face value is $1,000.Problem 8.30(a)Your answer is correct.Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.)Current price $eTextbook and MediaProblem 8.30(b)Your answer is correct.Realized yieldIf the bonds can be called in five years at a premium of 13.0 percent over par value, what is the investor's realized yield? (Roundanswer to 3 decimal places, e.g. 15.255%.)eTextbook and MediaProblem 8.30(c)1,350.95Realized rate of return3.822 %Attempts: unlimitedIf you bought one of these bonds today, what is your expected rate of return? (Round answer to 2 decimal places, e.g. 15.25%.)%Attempts: unlimited

As per instruction question 8.30(c) will be attempted. YTM is the annual return that the bond…

Answered: If you bought one of these bonds today,…

If you bought one of these bonds today, what is your expected rate of return? (Round answer to 2 decimal places, e.g. 15.25%.) Realized rate of return %

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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Question

Answer problem 8.30(c)

Crane Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.215 percent and a
yield to maturity of 6.0 percent. Assume face value is $1,000.
Problem 8.30(a)
Your answer is correct.
Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.)
Current price $
eTextbook and Media
Problem 8.30(b)
Your answer is correct.
Realized yield
If the bonds can be called in five years at a premium of 13.0 percent over par value, what is the investor's realized yield? (Round
answer to 3 decimal places, e.g. 15.255%.)
eTextbook and Media
Problem 8.30(c)
1,350.95
Realized rate of return
3.822 %
Attempts: unlimited
If you bought one of these bonds today, what is your expected rate of return? (Round answer to 2 decimal places, e.g. 15.25%.)
%
Attempts: unlimited

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