Question
need help ASAP....... 1.A 10-year bond pays interest of $27.50 semiannually, has a face value of $1,000, and is selling for $793.81. What are its
need help ASAP.......
1.A 10-year bond pays interest of $27.50 semiannually, has a face value of $1,000, and is selling for $793.81. What are its annual coupon rate and yield tomaturity?
The annual coupon rate is__________ %(Round to two decimalplaces).
The yield to maturity is_________%.(Round to two decimalplaces).
2.A zero coupon bond has a face value of $1,000 and matures in 5 years. Investors requirea(n) 6.3% annual return on these bonds. What should be the selling price of thebond?
The price of the bond is $_______.(Round to the nearestcent).
3.If the nominal rate of interest is 12.85% and the real rate of interest is 7.8%, what is the expected rate ofinflation?The expected rate of inflation is _________%.
(Round to two decimalplaces.)
4.A Ford Motor Co. coupon bond has a coupon rate of 7%, and pays annual coupons. The next coupon is due tomorrow and the bond matures 39 years from tomorrow. The yield on the bond issue is 6.05%. At what price should this bond trade today, assuming a face value of $1,000? The price of the bond today should be $__________.(Round to the nearestcent.)
5.With celebritybonds, celebrities raise money by issuing bonds to investors. The royalties from sales of the music are used to pay interest and principal on the bonds. In April of2009, EMI announced that it intended to securitize its back catalogue with the help of the Bank of Scotland. The bond was issued with a coupon rate of 6.7% and will mature on this day 36 years from now. The yield on the bond issue is currently 6.15%. At what price should this bond tradetoday, assuming a face value of $1,000 and annualcoupons? The price of the bond today should be $_________.(Round to the nearestcent.)
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