Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hello, I need help with a finance assignment, thank you Name: ____________________ Date: ____________ Quiz#3: Bonds 1. A 6 year bond from Levy's pays interest
Hello, I need help with a finance assignment, thank you
Name: ____________________ Date: ____________ Quiz#3: Bonds 1. A 6 year bond from Levy's pays interest of $70 annually and sells for $950. What is the: coupon rate? current yield? and yield to maturity? What will be it's value on maturity date? 2. A 30 year US Treasury Bond is issued with a face value of $1,000, paying interest of $50 a year. If the Fed decides to sell many of their holdings in US Treasury Bonds and the Fed has to increase interest rates to make the dollar more attractive...what will happen to the bond's: 1. 2. 3. 4. coupon rate? price of the bond? yield to maturity? current yield? 3. A corporate bond has 9 years until maturity, a coupon rate of 7%, and trades for $1,050. 1. What is the current yield on the bond? 2. What is the yield to maturity? 4. Why do bond values go down when interest rates go up? Go up when interest rates go down? 5. A $1000 bond has a current yield of 6% and a coupon rate of 7%. What is the bond's price? 6. A 6 year bond pays annually $70 and sells for $975. What's it's coupon rate, current yield, and yield-to-maturity? 7. If the above company wants to issue new 6-year bonds, what will be the coupon rate? 8. A bond has 10 years till maturity, has a coupon payment of $70, and trades for $1,150, what's it's current yield? Yield-to-maturity? 9. Valero has issued 9% annual coupon bonds that are now selling at a yield-tomaturity of 10% with a current yield of 9.8375%. What is the remaining maturity for these bonds? 10. Several years ago, AMGN issued new bonds at face value with a yieldto-maturity of 7%. Now, with 4 years left until the maturity of the bonds, the company has run into some hard times and the rating on their bonds has had a negative impact on their bond prices. The yield-to-maturity is now at 11%. What has happened to the price of the bond? If investors believe that the company will make good on their coupon payments but MIGHT go bankrupt and into default before the full value on their principal is returned, they now think that, at the most, they might get back only 80% of the face value at maturity. Knowing all this, if they were to buy this bond TODAY, what yield-tomaturity would they expect to receiveStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started