Question
Question 1 A bond has 23 year to maturity and a coupon rate of 7%. Coupons are paid semi-annually. If the YTM of the bond
Question 1
A bond has 23 year to maturity and a coupon rate of 7%. Coupons are paid semi-annually. If the YTM of the bond is 10%, what is the price of the bond today?
Round your answer to dollars and cents, for example 100.12.
Question 2
Today you purchase a 9-year bond at a YTM of 11%. The bond pays coupons annually and has a coupon rate of 9%. What is your 1-year rate of return if you sell the bond 1-year from now at a YTM of 11%.
Input your answer in decimals, not percent. Answer to 4 decimal places, for example 0.1234.
Question 3
On the way to campus in the morning, you purchased a 10-year, 11% coupon bond with a YTM of 11%. Later in the day, you sold the bond at a YTM of 12%. What is your 1-day rate of return on this bond investment?
Input your answer in decimals, not percent. Answer to 4 decimal places, for example 0.1234.
Question 4
One year ago, you purchased a 6-year, 8% coupon bond at a YTM of 8%. Today (one year later) you sold the bond at a YTM of 9%.
What was your percentage capital gain on this investment?
Input your answer in decimals, not percent. Answer to 4 decimal places, for example 0.1234.
Question 5
You purchase a 1-year, 3% coupon TIPS when rates are 11%. Over the year, inflation is 3%. You keep the bond until it matures in 1-year.
What is your 1-year rate of return on this investment (the nominal rate of return)? Answer in decimals, not percent, and round to 4 decimals. For example 0.1234.
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