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Unit 5 quiz chap. 8 and 15 bond xyz and bond abc both pay annual

Bond XYZ and bond ABC both pay annual coupons, mature in seven years, have a face value of $1,000, and have the same yield-to-maturity. Bond XYZ has a coupon rate of 8.5 percent and is priced at $1,035.09. Bond ABC has a coupon rate of 6.4 percent. What is the price of bond ABC?

XYZ

ABC

   

Coupons

85

64

   

Period

7

7

   

FV

1000

1000

   

YTM

       

Price

1035.09

                         

Six years ago, Allen Corporation issued bonds that pay annual coupons, have a face value of $1,000, have an annual coupon rate of 8.6 percent, and are scheduled to mature in four years. One year ago, you bought one of those bonds for $998. The bond just paid a coupon. If the percentage return on your bond was 4.6 percent over the past year, what is the price of the bond today?

                           

Today, a bond has a coupon rate of 10.8 percent, par value of $1000, 13 years until maturity, YTM of 9.6 percent, and semiannual coupons with the next one due in six months. One year ago, the price of the bond was $1,075. What is the current yield of the bond today?

                 

Microhard has issued a bond with the following characteristics:

       

Par: $1,000

       

Time to maturity:  15 years

       

Coupon rate:  11 percent

       

Semiannual payments

                 

Calculate the price of this bond if the YTM is (Do not round intermediate calculations and round your final answersto 2 decimal places. (e.g., 32.16)):

       

  

       

 

 

Price of the Bond

   

a.

11 percent

   

b.

13 percent

   

c.

9 percent

             

Stone Sour Corp issued 20 year bonds 2 years ago at a 7.1% coupon rate.  The bonds make semi-annual payments

If these bonds sell for 105% par value, what is the YTM?  Work must be shown as a formula.

         

Settlement Date

1/1/2000

     

Maturity Date

1/1/2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online

     

Annual Coupon Rate

7.10%

     

Coupons/year

2

     

Face value (%of Par)

100

     

Bond Price (% of Par)

105

                                   

Rhiannon Corp. has bonds on the market with 15.5 years to maturity.

   

The YTM is 6.2%,  current price is $1039.00.  The bonds make semi annual payments.

           

What is the coupon rate?

                           

A Japanese company has a bond outstanding that sells for 96% of it’s 100,000 yen par value.

The bond has a coupon rate of 6.3% paid annually and matures in 19 years/

   

What is the YTM of this bond?

                           

An investment offers a 12% total return over the coming year. An investor thinks

 

the total real return will only be 8%.  What does the investor think the inflation rate will be

over the next year?

                           

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