Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bonds issued by Oxygen Optimization were priced at 836.64 dollars 6 months ago. The bonds pay semi-annual coupons, have a coupon rate of 5.46 percent,

Bonds issued by Oxygen Optimization were priced at 836.64 dollars 6 months ago. The bonds pay semi-annual coupons, have a coupon rate of 5.46 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 4.58 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. In another case, bonds issued by Fairfax Paint have a par value of 1000 dollars, were priced at 1,175.23 dollars six months ago, and are priced at 1,097.89 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 -1.61 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. Lastly, Bonds issued by Fairfax Mechanical were priced at 1,054.17 dollars six months ago and are priced at 1,038.31 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 7.16 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.

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

The Handbook Of Investing In Todays Financial Markets

Authors: Alessandro De Cristofaro

1st Edition

1070350931, 978-1070350936

More Books

Students also viewed these Finance questions

Question

How is the present value of a future payment calculated?

Answered: 1 week ago