All bonds have a par of $1,000 unless otherwise stated.
Subject: Business / Finance
Question
All bonds have a par of $1,000 unless otherwise stated.
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Find the price of a 14-year bond that has a coupon of 7.50% and par of $1,000. The ?market interest rate is 7.21%. ?
Find the price of a 14-year, $1,000 par, zero-coupon bond, given that the market interest rate is 7.21%. ?
Find the new price of the bond in (2) if the market interest rate increases to 7.70%. ?
Find the price of a 4-year bond that has a coupon of 8.44% (paid quarterly) and par of $1,000. The market interest rate is 7.80%. ?
Find the price of a 6-year bond that has a coupon of 8.50% (paid semi-annually) and par of $1,000. The market interest rate is 8.20%. ?
A 16-year bond has a coupon of 5.20% and par of $1,000. The price of this bond is $1,025.16. Find the yield to maturity of this bond. ?
A 20-year zero coupon bond has a par of $1,000. The price of this bond is $364.16. Find the yield to maturity of this bond. ?
9. Find the price and current yield of the following three bonds.
(a) Maturity = 10 years, coupon = 6.56%, iM = 5.98%.
(b) Maturity = 12 years, coupon = 5.56%, iM = 6.28%.
(c) Maturity = 20 years, coupon = 7.56%, iM = 6.98%.
Today an investor purchases the first bond in (a). The investor winds up selling the bond two years from today, and at that moment iM = 5.16%. What is the actual (realized) annual rate of return earned by the investor?
Today an investor purchases the second bond in (a). The investor winds up selling the bond four years from today, and at that moment iM = 6.96%. What is the actual (realized) annual rate of return earned by the investor?
