{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-22T19:01:00-04:00", "answer_date": "2024-05-22 19:01:00", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1526657", "url": "\/study-help\/questions\/a-30year-maturity-bond-has-a-7-coupon-rate-paid-1526657", "question_creation_date_js": "2024-05-22T19:01:00-04:00", "question_creation_date": "May 22, 2024 07:01 PM", "meta_title": "[Solved] A 30-year maturity bond has a 7% coupon r | SolutionInn", "meta_description": "Answer of - A 30-year maturity bond has a 7% coupon rate, paid annually. It sells today for $867.42. A 20-year maturity bond has a | SolutionInn", "meta_keywords": "30-year,maturity,bond,7%,coupon,rate,paid,annually,sells,today,$867.42,20-year", "question_title_h1": " A 30-year maturity bond has a 7% coupon rate, paid annually. It sells today for $867.42. A 20-year maturity bond has a 6.5% coupon", "question_title": " A 30-year maturity bond has a 7% coupon rate, paid annually.", "question_title_for_js_snippet": "A 30 year maturity bond has a 7 coupon rate, paid annually It sells today for $867 42 A 20 year maturity bond has a 6 5 coupon rate, also paid annually It sells today for $879 50 A bond market analyst forecasts that in five years, 25 year maturity bonds will sell at yields to maturity of 8 and 15 year maturity bonds will sell at yields of 7 5 Because the yield curve is upward sloping, the analyst believes that coupons will be invested in short term securities at a rate of 6 a Calculate the (annualized) expected rate of return of the 30 year bond over the 5 year period (Round your answer to 2 decimal places ) 30 year bond 9 69 b What is the (annualized) expected return of the 20 year bond (Round your answer to 2 decimal places ) 20 year bond 45 32 ", "question_description": "\"image", "transcribed_text": "A 30-year maturity bond has a 7% coupon rate, paid annually. It sells today for $867.42. A 20-year maturity bond has a 6.5% coupon rate, also paid annually. It sells today for $879.50. A bond market analyst forecasts that in five years, 25-year maturity bonds will sell at yields to maturity of 8% and 15-year maturity bonds will sell at yields of 7.5%. Because the yield curve is upward sloping, the analyst believes that coupons will be invested in short-term securities at a rate of 6%. a. Calculate the (annualized) expected rate of return of the 30-year bond over the 5-year period. (Round your answer to 2 decimal places.) 30-year bond 9.69 % b. What is the (annualized) expected return of the 20-year bond? (Round your answer to 2 decimal places.) 20-year bond 45.32%", "related_book": { "title": "Cost Accounting Foundations and Evolutions", "isbn": "9781439044612, 1439044619, 978-1111626822", "edition": "8th Edition", "authors": "Michael R. Kinney, Cecily A. Raiborn", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/146.jpg", "uri": "\/textbooks\/cost-accounting-foundations-and-evolutions-8th-edition-146", "see_more_uri": "" }, "free_related_book": { "isbn": "B09PHG3QT6", "uri": "\/textbooks\/high-school-physics-summary-a-summary-of-major-topics-in-physics-1st-edition-979-8793601993-290330", "name": "High School Physics Summary A Summary Of Major Topics In Physics", "edition": "1st Edition" }, "question_posted": "2024-05-22 19:01:00", "see_more_questions_link": "\/study-help\/questions\/business-corporate-finance-2020-July-01", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/melissa-buys-an-ipod-for-120-and-gets-consumer-surplus", "description": "Melissa buys an iPod for $120 and gets consumer surplus of $80. a. What is her willingness to pay? b. If she had bought the iPod on sale for $90, what would her consumer surplus have been? c. If the...", "stars": 3 }, { "url": "\/in-a-recent-survey-of-fulltime-female-workers-ages-22-to", "description": "In a recent survey of full-time female workers ages 22 to 35 years, 46% said that they would rather give up some of their salary for more personal time. (Data extracted from \"I'd Rather Give Up,\" USA...", "stars": 3 }, { "url": "\/study-help\/questions\/current-attempt-in-progress-on-december-31-2021-coronado-co-8760202", "description": "Current Attempt in Progress On December 31, 2021, Coronado Co. had 220,000 common shares outstanding. The company also had outstanding a convertible bond with a face value of $94,500 that had been...", "stars": 3 }, { "url": "\/study-help\/psychology\/1-make-sure-you-can-see-over-partitions-1984085", "description": "1. Make sure you can see over partitions.", "stars": 3 }, { "url": "\/herzogg-company-organized-in-2010-has-the-following-transactions-related", "description": "Herzogg Company, organized in 2010, has the following transactions related to intangible assets . InstructionsPrepare the necessary entries to record these intangibles. All costs incurred were for...", "stars": 3 }, { "url": "\/study-help\/questions\/the-company-is-in-the-process-of-preparing-a-budget-9846363", "description": "The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $263,000 for May. Of these sales, $78,900 will be for cash; the remainder will...", "stars": 3 }, { "url": "\/study-help\/questions\/the-following-information-relates-to-two-investments-held-by-a-9705377", "description": "The following information relates to two investments held by a company as part of its portfolio of investments. The possible economic scenarios and expected returns have been provided below. The...", "stars": 3 }, { "url": "\/study-help\/questions\/montgomery-company-has-developed-the-following-flexible-budget-formulas-for-1814215", "description": "Montgomery Company has developed the following flexible budget formulas for its four overhead items: Overhead item Maintenance Fixed Cost Variable rate per direct labor hour $10,000 $ 3.00 Power $...", "stars": 3 }, { "url": "\/study-help\/questions\/following-are-the-asset-liability-and-equity-items-of-dumont-1863642", "description": "Following are the asset, liability, and equity items of Dumont Inc. at January 31, 2015, after its first month of operations. Required: = ASSETS LIABILITIES + EQUITY Cash $1,300 Bank Loan $8,000...", "stars": 3 }, { "url": "\/study-help\/questions\/jeok-claims-he-brought-a-trick-coin-from-a-casino-1003501", "description": "Je-ok claims he brought a trick coin from a casino. In particular, he claims that the coin is more likey to come up heads than tails. To validate his claim, he flips the coin 10 times, and it comes...", "stars": 3 }, { "url": "\/study-help\/questions\/a-coin-is-dropped-from-a-height-of-one-meter-1610274", "description": "A coin is dropped from a height of one meter and is observed to bounce half of the previous maximum height reached. What is the total vertical distance covered by the coin until at halts? A . 2 m B ....", "stars": 3 }, { "url": "\/study-help\/questions\/nicky-was-listening-to-one-of-her-classmates-give-a-1544021", "description": "Nicky was listening to one of her classmates give a speech about architecture in the city. At one point, the speaker used the term \"green spaces\" to describe city parks. Nicky heard the word \"green\"...", "stars": 3 }, { "url": "\/study-help\/questions\/par-value-coupon-rate-years-to-maturity-yield-to-maturity-8626086", "description": "Par Value Coupon Rate Years to Maturity Yield to Maturity Price Coupon Frequency $1,000.00 ? 25 7% $1,000.00 semiannual $5,000.00 ? 25 10% $5,000.00 quarterly $5,000.00 ? 30 6% $9,169.79 monthly...", "stars": 3 }, { "url": "\/study-help\/essentials-of-statistics-for-business-economics\/a-bloomberg-businessweek-subscriber-study-asked-in-the-past-12-months-when-877100", "description": "A Bloomberg Businessweek subscriber study asked, In the past 12 months, when traveling for business, what type of airline ticket did you purchase most often? A second question asked if the type of...", "stars": 3.5 }, { "url": "\/study-help\/fundamentals-of-human-resource-management\/defi-ne-a-benefi-t-and-identify-four-strategic-benefi-1759002", "description": "Defi ne a benefi t and identify four strategic benefi ts considerations.", "stars": 3.5 }, { "url": "\/study-help\/fundamentals-of-human-resource-management\/explain-the-importance-of-managing-the-costs-of-health-benefi-1758999", "description": "Explain the importance of managing the costs of health benefi ts and identify some methods of doing so.", "stars": 3.5 }, { "url": "\/study-help\/fundamentals-of-human-resource-management\/discuss-the-shift-of-retirement-plans-from-defi-nedbenefi-t-1758998", "description": "Discuss the shift of retirement plans from defi ned-benefi t to defi ned-contribution and cash balance programs.", "stars": 3.5 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/6-problem-1206-ebook-problem-1206-six-years-ago-your-1526656", "next": "\/study-help\/questions\/equivalent-units-unit-cost-valuation-of-goods-transferred-out-and-1526658" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Finance", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-finance" }, { "name": " A 30-year maturity bond has a 7% coupon rate, paid annually.", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/a-30year-maturity-bond-has-a-7-coupon-rate-paid-1526657" } ], "skill_details": { "skill_id": "13", "skill_name": "Finance", "parent_id": "1" } } } }