Question
Please, answr all the following question 1. A bond with par value of $1,000 has an annual coupon rate of 6.0% and currently sells for
Please, answr all the following question
1. A bond with par value of $1,000 has an annual coupon rate of 6.0% and currently sells for $940. What is the bonds current yield? (Round your answer to 2 decimal places.)
2a. Calculate the effective annual interest rate for (1) A 3-month T-bill selling at $97,820 with par value $100,000. (2) A 8% coupon bond selling at par and paying coupons semiannually. (Round your answers to 2 decimal places. Omit the "%" sign in your response.)
b. Which security has a higher effective annual interest rate? T-bill or Coupon bond | |||||
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2. What will be the realized compound yield to maturity if the 1-year interest rate next year turns out to be (a) 6%, (b) 9%, (c) 12%? (Round your answers to 2 decimal places. Omit the "%" sign in your response.)
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