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Anna is looking to invest in a bond with a P1,000 par value, 8 percent annual coupon pays interest semiannually and will mature in 15 years. The nominal yield to maturity is 11 percent. What is the value of the bond?
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- Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments ata rate of 5.875 percent. If these bonds have a market price of $981.13, what is the yield to maturity and effective annual yield can she expect to earn?Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 6.19 percent. If these bonds have a market price of $891.84, what yield to maturity and effective annual yield can she expect to earn?Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 5.875 percent. If these bonds have a market price of $981.13, what yield to maturity can she expect to earn?
- Carrie wants to invest in five-year bonds that are currently priced at $872.48. These bonds have a coupon rate of 6% and make semiannual coupon payments. What is the current market yield of this bond?Today an investor purchases a 30-year bond (face value =\$1,000) for $627.73. The bond has a coupon rate of 4% and a yield to maturity of 7%. It pays coupons annually (not semiannually). The investor plans to hold the bond for 1 year. If the yield to maturity of the bond becomes 8% at the end of the year, what is the bond rate of return over the year?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?
- an individual is interested in a five year bond that pays a 6.8 percent coupon rate with interest to be received semiannually. the required rate of return is 8 percent. what is the most they would be willing to pay for this bond ? Assume face value is $1000.Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 5.875 percent. If these bonds have a market price of $981.13, what yield to maturity can she expect to earn? On yield to maturity do you multiply or divide IY when it is semi annual?Suppose you purchase a 10-year 5% (semi-annual pay) coupon bond. You plan to hold the bond for six months and then sell it. If the bond’s yield to maturity was 4% when you purchased and sold the bond, what cash flows will you pay and receive from your investment in the bond per $1000 face value?
- Diane Carter is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 9 percent. Assume annual coupon payments. What is the current value of this bond?Anna is considering investing in a bond currently selling in the market for 875 EURO. The bond has four years to maturity, a 1000 EURO face value and a 7% coupon rate. The next annual interest payment is due one year from today. The appropriate discount rate for the securities of similar risk is10%. Estimate the intrinsic value of the bond. Based on the result of this estimation, should Ann purchase the bond? Explain. ii.Estimate the yield-to-maturity of the bond. Based on the result of this estimation, should Ann purchase the bond? Explain. QUESTION 4 The callable bond has a par value of 100 LT, 8% coupon rate and five years to maturity. The bond makes annual interest payment. Investor purchased this bond for 90 LT when it was issued in May 2008. What is the yield-to-maturity of this bond? ii.What is the duration of this bond if currently its market price is 95 LT? QUESTION FIVE Bond with face value of 1000 EURO, 2 years’ time to maturity and 10 % coupon rate, makes…Landon is considering the purchase of a $2500 bond from Braydon. There are 5 years remaining until the bond matures. Coupon payments are made on a semiannual basis. Landon decides to offer Braydon $2000 for the bond because he wants to earn precisely 30% yield per year compounded semiannually on the investment. What is the effective annual bond interest rate for this particular bond? Bond Equation: P= Vr(P|A, i%, n).