Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bond A pays annual coupons, pays its next coupon in 1 year, matures in 15 years, and has a face value of 1,000 dollars.Bond B

  1. Bond A pays annual coupons, pays its next coupon in 1 year, matures in 15 years, and has a face value of 1,000 dollars.Bond B pays semi-annual coupons, pays its next coupon in 6 months, matures in 12 years, and has a face value of 1,000 dollars.The two bonds have the same yield-to-maturity.Bond A has a coupon rate of 5.62 percent and is priced at 657.82 dollars.Bond B has a coupon rate of 5.3 percent.What is the price of bond B?
  2. Castor owns one bond A and one bond B.The total value of these two bonds is 1,324.44 dollars.Bond A pays semi-annual coupons, matures in 14 years, has a face value of 1,000 dollars, and pays its next coupon in 6 months.Bond B pays annual coupons, matures in 18 years, has a face value of 1,000 dollars, has a yield-to-maturity of 8.84 percent, and pays its next coupon in one year.Both bonds have a coupon rate of 4.94 percent.What is the yield-to-maturity for bond A?Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
  3. Arjen owns investment A and 1 bond B.The total value of his holdings is 1,473 dollars.Investment A is expected to pay annual cash flows to Arjen of 179.3 dollars per year with the first annual cash flow expected later today and the last annual cash flow expected in 4 years from today.Investment A has an expected return of 3.1 percent.Bond B pays semi-annual coupons, matures in 14 years, has a face value of $1000, has a coupon rate of 5.5 percent, and pays its next coupon in 6 months.What is the yield-to-maturity for bond B?Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
  4. Two years ago, the price of a bond was 1,051.49 dollars, and one year ago, the price of the bond was 1,097.81 dollars.Over the past year, the bond paid a total of 89.31 dollars in coupon payments, which were just paid.If the bond is currently priced at 1,086.41 dollars then what was the rate of return for the bond over the past year (from 1 year ago to today)?The par value of the bond is 1,000 dollars.Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
  5. Bonds issued by Fairfax Mechanical were priced at 1,081.81 dollars six months ago and are priced at 1,068.15 dollars today.The bonds have a face value of 1,000 dollars, pay semi-annual coupons, and just made a coupon payment.The bonds had a percentage return over the past six months (from 6 months ago to today) of 8.79 percent.What is the coupon rate of the bonds?Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
  6. Bonds issued by Oxygen Optimization were priced at 1,017.23 dollars 6 months ago.The bonds pay semi-annual coupons, have a coupon rate of 10.18 percent, just made a coupon payment, and have a face value of 1,000 dollars.If the bonds had a percentage return over the past 6 months (from 6 months ago to today) of 2.26 percent, then what is the current yield of the bonds today?Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
  7. Bonds issued by Fairfax Paint have a par value of 1000 dollars, were priced at 1,106.07 dollars six months ago, and are priced at 1,031.95 today.The bonds pay semi-annual coupons and just made a coupon payment.If the bonds had a percentage return over the past 6 months (from 6 months ago to today) of -2.72 percent, then what was the current yield of the bonds 6 months ago?Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098

Please round the answers to the nearest hundreds! Explanation would be helpful if you could provide me one. Thank you !

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance Core Principles And Applications

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

6th Edition

1260571122, 978-1260571127

More Books

Students also viewed these Finance questions