A bond has a $1,000 par value bond with a 4% annual coupon rate and it matures in 8 years. The yield to maturity is 5.1%, find the bond's price. Imagine the bond is callable after 5 years, where the call price is $ 1100. Find the yield to call.
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- A newly issued bond with 1 year to maturity has a price of $1,000, which equals its face value. The coupon rate is 15% and the probability of default in 1 year is 35%. The bond’s payoff in default will be 65% of its face value. a. Calculate the bond’s expected return. b. Use a data table to show the expected return as a function of the recovery percentage and the price of the bond. Please show how you got part B using all functions.Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the rate of return of the bond? What is the yield to maturity of the bond?Consider a bond with a face value of $5,000 that pays a coupon of $200 for 5 years. Suppose the bond is purchased at $5,000, and can be resold next year for $4,800. What is the rate of return and the yield to maturity of the bond? rate of return = 4%, yield to maturity = 0% rate of return = 0%, yield to maturity = 4% rate of return = 8%, yield to maturity = - 4% rate of return = 4%, yield to maturity = 4%
- A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. Assume a face value of $1,000 and annual coupon payments.a) If the bond has a yield to maturity of 9% 1 year from now, what will its price be at that time?b) What will be the rate of return on the bond? c) If the inflation rate during the year is 3%, what is the real rate of return on the bond? Assume annual interest payments.A Bond has a face value of ₵ 1000 and pays a coupon of 10% annually. It has five-year life. The market interest rate (yield to maturity) is 10%. Find the Duration of this bond Find the convexity of this bond If the interest rate increase by 5%, by how much will the bond price decrease Compute the new price of the bondsuppose a 30 year, pay coupon of 4% is priced to yield 5%. par = 1000. the bond pays its coupon annually. calculate the instrinsic value of the bond. decide whether the bond is at premium or discount? please show the calculation using excel
- You are holding a 5-year bond with a 6% annual coupon rate, an 8% yield to maturity and a $1,000 par value. Coupons are paid annually. A. How much will the bond price change if the market yield falls by 1%? B. Calculate the duration of this bond when the yield to maturity is 8%. C. What are the predicted bond prices when you use duration? How large is prediction error in percentage?Consider a bond that pays a 10% coupon rate of interest, has a par value of 1,000 and matures in 4 years. Suppose also that the market rate of interest for such a bond (required rate of return) is 8%. Calculate the intrinsic value or the price of the bonds? (round off your answer to the nearest whole number).Suppose a 5% coupon, 4 year bond is selling for $990. The face value is $1000. The coupon ispaid every six months. Answer the following questions. (a) Calculate the yield to maturity of this bond. (b) Calculate the price of this bond if the yield to maturity increases by 1% with maturityunchanged. (c) Calculate the price of this bond if the yield to maturity decreases by 1% with maturityunchanged.
- Suppose you purchase a $1,000 bond with a coupon rate of 8% matures in 5 years at par, and you plan to sell it at the end of 3 years at the prevailing market price. When you purchase the bond, your investment advisor predicts that similar bonds with 2 years to maturity yield at 6%. What is the expected yield to maturity on the bond?Suppose a 5% coupon, 4 year bond is selling for $990. The face value is $1000. The coupon ispaid every six months. Answer the following questions. (a) Calculate the yield to maturity of this bond. (b) Calculate the price of this bond if the yield to maturity increases by 1% with maturityunchanged. (c) Calculate the price of this bond if the yield to maturity decreases by 1% with maturityunchanged. Can you handwrite or type it out instead of excelA bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. Assume a face value of $1,000 and annual coupon payments. 1) If the bond has a yield to maturity of 9% 1 year from now, what will its price be at that time? 2) What will be the rate of return on the bond? 3) If the inflation rate during the year is 3%, what is the real rate of return on the bond? Please show workings with formulas.
