Sara owns one bond A and one bond B. The total value of these two bonds is $1,860.00. Bond A pays semi-annual coupons, matures in 12 years, has a face value of $1,000.00, and pays its next coupon in 6 months. Bond B pays annual coupons, matures in 3 years, has a face value of $1,000.00, has a yield-to- maturity of 10.64 percent, and pays its next coupon in one year. Both bonds have a coupon rate of 9.30 percent. What is the yield-to-maturity for bond A? O 10.54% (plus or minus 2 bps) O 10.92% (plus or minus 2 bps) O 5.92% (plus or minus 2 bps) O 8.87% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer

Sara owns one bond A and one bond B. The total value of these two bonds is $1,860.00. Bond A pays semi-annual coupons, matures in 12 years, has a face value of $1,000.00, and pays its next coupon in 6 months. Bond B pays annual coupons, matures in 3 years, has a face value of $1,000.00, has a yield-to- maturity of 10.64 percent, and pays its next coupon in one year. Both bonds have a coupon rate of 9.30 percent. What is the yield-to-maturity for bond A? O 10.54% (plus or minus 2 bps) O 10.92% (plus or minus 2 bps) O 5.92% (plus or minus 2 bps) O 8.87% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Shannon purchases a bond for $952.00. The bond matures in 3 years, and Shannon will redeem it at its face value of $1,000. Coupon payments are paid annually. If Shannon will earn a yield of 12%/year compounded yearly, what is the bond coupon rate?
An Investor has two bonds in her portfollo, Bond C and Bond Z. Each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 8.5%. Bond C pays a 11.5% annual coupon, while Bond Z is a zero coupon bond. a. Assuming that the yield to maturity of each bond remains at 8.5% over the next 4 years, calculate the price of the bonds at each of the following years to maturity. Round your answers to the nearest cent. Years to Maturity Price of Bond C Price of Bond Z 4 $ 1 0 $ $ $ $ $ -M $
The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 11 years until maturity. You can purchase the bond for $1,155. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 3 percent?
Stacy purchases a $60,000 bond for $57,500. The coupon rate is 6% per year payable quarterly. The bond has a 15 year life, at which time it is cased in for face value. The bank's interest is 4.8% per year compounded monthly. Stacy decides to sell the bond at the end of 8 years. What is the bond value at this time? work in terms of excel
Stacy purchases a $60,000 bond for $57,500. The coupon rate is 6% per year payable quarterly. The bond has a life of 15 years, at which time it can be cashed in for face value. If the bank's interest is 4.8% per year compounded monthly, what is the present worth of the bond?
The saleemi corporation’s $1,000 bonds pay 6 percent interest annually and have 11 years until maturity. You can purchase the bond for $875. A. What is the yield to maturity on this bond? B. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? A. The yield to maturity on the saleemi bonds is Round to two decimal places
A 3-year corporate bond is issued on 1/5/19 with a face value of $100 and a coupon of 2% pa (paid semi-annually with coupons paid on April 30 and October 31). On 2/7/19 Jessica buys this bond at a yield of 2% pa and she sells it on 28/8/19 at a yield of 2.4% pa. What has her annual return been?
Lola Ruiz has a bond that has 10 years to maturity, a face value of $1,000, an 7 percent interest rate, and a market price of $1,350. What is the dollar amount of annual interest on this bond?
On January 1, 2013, Janet buys a bond for $10,000 that makes coupon payments of $600 after each of the following two years and returns its principal of $10,000 at the end of the second year. In other words, it is a standard coupon bond with a 6 percent annual interest rate making payments once each year. On February 1, 2014, Janet receives her first coupon payment of $600. At that time, the market interest rate on bonds like hers has fallen to 4 percent. She sells her bond to Justin at that time, for a price equal to the present value of the bond's payments. How much does Justine pay Janet for the bond?
Bones Ely owns a $1,000 face-value bond with three years to maturity. The bond makes annual interest payments of$75, the first to be made one year from today. The bond is currently priced at $975.48. Given an appropriate discount rate of 10%, should Bones hold or sell the bond?
The Saleemi Corporation's $1,000bonds pay 5 percent interest annually and have 13 years until maturity. You can purchase the bond for $1,075. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 3 percent? The yield to maturity on the Saleemi bonds is ______%. (Round to two decimal places.
Zuber Issa owns ordinary (Asda Stores Ltd.) bonds that sell for $889.49 and pay coupons twice per year. These Asda Stores bonds yield 10.34% and their annual coupon rate is 9%. The face value of the bonds is $1,000. If the next coupon is paid in exactly six months, you will tell Zuber Issa that his Asda Stores bonds will mature in: a. 21 years b. 27 years c. 18 years d. 20 years e. 19 years

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