5. You have just purchased an outstanding 10-year bond with a par value of $1,000 for $1,145.68. Its annual coupon payment is $75. What is the bond's yield to maturity?
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- Consider a bond that has a current value of $1,081.11, a face value of $1,000.00, a coupon rate of 10% and five years remaining to maturity.a. What is the bond’s yield-to-maturity today?b. If the bond’s yield does not change, what is its value one year from today? Please solve both partsSuppose that a 1-year zero-coupon bond with face value $100 currently sells at $94.34, while a 2-year zero sells at $84.99. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 12% per year.a. What is the yield to maturity of the 2-year zero?b. What is the yield to maturity of the 2-year coupon bond?c. What is the forward rate for the second year?d. According to the expectations hypothesis, what are (i) the expected price of the coupon bond at the end of the first year and (ii) the expected holding-period return on the coupon bond over the first year?e. Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis?5. (a) Suppose that you have purchased a 5-year zero-coupon bond with face value of$1000 and a price of $800. If you hold the bond to maturity, what is your annualrate of return? (b) Now suppose you have purchased a 5-year bond with face value of $1000, a 10%annual coupon, and a price of $900. Assuming that you hold the bond to maturity,is the IRR greater or less than the return on the bond in part (a)?
- 1. Suppose you purchase bond that has a coupon of $75, face value of S1,000, and current price of $1,100. What is your coupon rate? What is your current Save Answer yield? 2. Suppose you purchase a bond with a coupon of $50 for $1,010. You sell it one year later for $900. What rate of return did you carn?Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $90.44, while a 2-year zero sells at $82.64. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 12% per year. Required: a. What is the yield to maturity of the 2-year zero? b. What is the yield to maturity of the 2-year coupon bond? c. What is the forward rate for the second year? d. If the expectations hypothesis is accepted, what are (1) the expected price of the coupon bond at the end of the first year and (2) the expected holding-period return on the coupon bond over the first year? e. Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis?…8) A zero-coupon bond with a par value of $1,000 is maturing in 8 years. Its current price is $820. a. Compute the bond's yield to maturity. b. What will happen to the bond's price if its yield to maturity decreases? Please explain your answer for full credit. Foc MacBook Pro
- 3. Consider a five year $1000 semiannual coupon bond with a 5% coupon rate. If the bond is current trading for a price of $957.35, what is the bond's yield to maturity? If the bond's yield to maturity increase a little bit, what will the bond's price be?hi there, a-)What is the duration of a two-year bond that pays an annual coupon of 11.4 percent and has a current yield to maturity of 13.4 percent? Use $1,000 as the face value. b) What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? Use $1,000 as the face value.Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $94.34, while a 2-year zero sells at $84.99. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 12% per year. What is the yield to maturity of the 2-year zero? What is the yield to maturity of the 2-year coupon bond? What is the forward rate for the second year?
- Consider a bond that has a current value of $1,081.11, a face value of $1,000.00, a coupon rate of 10% and five years remaining to maturity.a. What is the bond’s yield-to-maturity today?b. If the bond’s yield does not change, what is its value one year from today?3. Suppose the face value of a discount bond (i.e. zero coupon bonds) is 8000 and the bond matures in 12 years. a. What will be the price of the bond if the market interest rate is 8%? b. What will be the price of the bond if the market interest rate is 10%? c. Explain the relationship between bond price and interest rate using your answers you got for question a and question b.Suppose the current, zero-coupon, yield curve for risk-free bonds is as follows: Maturity (years) Yield to Maturity 1 4.33% 2 4.64% 3 4.92% 4 5.09% 5 5.30% a. What is the price per $100 face value of a 3-year, zero-coupon risk-free bond? b. What the price per $100 face value of a 4-year, zero-coupon, risk-free bond? c. What is the risk-free interest rate for a 1-year maturity? Note: Assume annual compounding. a. What is the price per $100 face value of a 3-year, zero-coupon risk-free bond? The price is $ (Round to the nearest cent.) b. What is the price per $100 face value of a 4-year, zero-coupon, risk-free bond? The price is $ (Round to the nearest cent.) c. What is the risk-free interest rate for a 1-year maturity? The risk-free rate is %. (Round to two decimal places.)