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BOND YIELDS Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, the band can be called in 6 years at a price of $1,060 and it sells for $1,150 a. What is the bond's nominal yleld to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the bond's nominal yield to call? Do not round Intermediate calculations. Round your answer to two decimal places. Would an investor be more likely to earn the YTM or the YTC? -Select- b. What is the current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. % Is this yield affected by whether the bond is likely to be called? 1. If the bond is called, the current yield and the capital gains yield will both be different. II. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different III. If the bond is called, the current yield will remain the same but the capital gains yield will be different. IV. If the bond is called, the current yield and the capital gains yield will remain the same. V. If the bond is called, the capital gains yield will remain the same but the current yield will be different. c. What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calcuation, fregired. Round your answer to two decimal places. Enter a loss percentage, if any, with a minus sign. % Is this yield dependent on whether the bond is expected to be called? 1. The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called. II. If the bond is expected to be called, the appropriate expected total return is the YTM. III. If the bond is not expected to be called, the appropriate expected total return is the YTC. IV. If the bond is expected to be called, the appropriate expected total return will not change. V. The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called. -Select- BOND YIELDS Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000 for $1,150. a. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round % What is the bond's nominal yield to call? Do not round intermediate calculations. Round your % Would an investor. be more likely.to.earn the YTM.or.the. YTC?..... -Select- Since the YTM is above the YTC, the bond is likely to be called. Since the YTC is above the YTM, the bond is likely to be called. Since the YTM is above the YTC, the bond is not likely to be called. ition of the current yield and Since the YTC is above the YTM, the bond is not likely to be called. Since the coupon rate on the bond has declined, the bond is not likely to be called. Is this yield affected by whether the bond is likely to be called? 1. If the bond is called, the current yield and the capital gains yield will both be differe II. If the bond is called, the current yield and the capital gains yield will remain the sar III. If the bond is called, the current yield will remain the same but the capital gains yie IV. If the bond is called, the current yield and the capital gains yield will remain the sam V. If the bond is called, the capital gains yield will remain the same but the current yiel c. What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated decimal places. Enter a loss BOND YIELDS Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, the band can be called in 6 years at a price of $1,060 and it sells for $1,150 a. What is the bond's nominal yleld to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the bond's nominal yield to call? Do not round Intermediate calculations. Round your answer to two decimal places. Would an investor be more likely to earn the YTM or the YTC? -Select- b. What is the current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. % Is this yield affected by whether the bond is likely to be called? 1. If the bond is called, the current yield and the capital gains yield will both be different. II. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different III. If the bond is called, the current yield will remain the same but the capital gains yield will be different. IV. If the bond is called, the current yield and the capital gains yield will remain the same. V. If the bond is called, the capital gains yield will remain the same but the current yield will be different. c. What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calcuation, fregired. Round your answer to two decimal places. Enter a loss percentage, if any, with a minus sign. % Is this yield dependent on whether the bond is expected to be called? 1. The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called. II. If the bond is expected to be called, the appropriate expected total return is the YTM. III. If the bond is not expected to be called, the appropriate expected total return is the YTC. IV. If the bond is expected to be called, the appropriate expected total return will not change. V. The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called. -Select- BOND YIELDS Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000 for $1,150. a. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round % What is the bond's nominal yield to call? Do not round intermediate calculations. Round your % Would an investor. be more likely.to.earn the YTM.or.the. YTC?..... -Select- Since the YTM is above the YTC, the bond is likely to be called. Since the YTC is above the YTM, the bond is likely to be called. Since the YTM is above the YTC, the bond is not likely to be called. ition of the current yield and Since the YTC is above the YTM, the bond is not likely to be called. Since the coupon rate on the bond has declined, the bond is not likely to be called. Is this yield affected by whether the bond is likely to be called? 1. If the bond is called, the current yield and the capital gains yield will both be differe II. If the bond is called, the current yield and the capital gains yield will remain the sar III. If the bond is called, the current yield will remain the same but the capital gains yie IV. If the bond is called, the current yield and the capital gains yield will remain the sam V. If the bond is called, the capital gains yield will remain the same but the current yiel c. What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated decimal places. Enter a loss
