#1 Assume a par value of $1,000. Caspian Sea plans to issue a 16.00 year, semi-annual pay bond that has a coupon rate of 8.17%. If the yield to maturity for the bond is 7.56%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not submitted Attempts Remaining: Infinity # 2 Assume a par value of $1,000. Caspian Sea plans to issue a 18.00 year, semi-annual pay bond that has a coupon rate of 7.93%. If the yield to maturity for the bond is 8.13%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not submitted Attempts Remaining: Infinity #3 Assume a par value of $1,000. Caspian Sea plans to issue a 26.00 year, semi-annual pay bond that has a coupon rate of 16.00%. If the yield to maturity for the bond is 16.0%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places.

#1 Assume a par value of $1,000. Caspian Sea plans to issue a 16.00 year, semi-annual pay bond that has a coupon rate of 8.17%. If the yield to maturity for the bond is 7.56%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not submitted Attempts Remaining: Infinity # 2 Assume a par value of $1,000. Caspian Sea plans to issue a 18.00 year, semi-annual pay bond that has a coupon rate of 7.93%. If the yield to maturity for the bond is 8.13%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not submitted Attempts Remaining: Infinity #3 Assume a par value of $1,000. Caspian Sea plans to issue a 26.00 year, semi-annual pay bond that has a coupon rate of 16.00%. If the yield to maturity for the bond is 16.0%, what will the price of the bond be? Submit Answer format: Currency: Round to: 2 decimal places.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 9P: Bond Valuation and Interest Rate Risk The Garraty Company has two bond issues outstanding. Both...

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a. Reset the Data Section to its initial values. The price of this bond is 1,407,831. What would it be if there were only 9 or 8 years to maturity? Use the worksheet to compute the bond issue prices and enter them in the spaces provided. Bond issue price (9 years to maturity) __________________ Bond issue price (8 years to maturity) __________________ b. Compare these prices to the bond-carrying values found in the effective interest amortization schedule you originally printed out in requirement 3. Explain the similarity. c. Click the Chart sheet tab. The chart presented shows the price behavior of this bond based on years to maturity. Explain what effect years to maturity has on bond prices. Check your explanation by trying 8% as the effective rate (cell E10) and clicking the Chart sheet tab again. Also try 9%. When the assignment is complete, close the file without saving it again. Worksheet. Modify the BONDS3 worksheet to accommodate bonds with up to 20-year maturity. Use your new model to determine the issue price and amortization schedules of a 2,000,000, 18-year, 10% bond issued to yield 9%. Preview the printout to make sure that the worksheet will print neatly, and then print the worksheet. Save the completed file as BONDST. Hint: Expand both amortization schedules to 20 years. Expand the scratch pad to 20 years. Modify FORMULA1 in cell F17 to include the new ranges. Chart. Using the BONDS3 file, prepare a line chart that plots annual interest expense over the 10-year life of this bond under both the straight-line and effective interest methods. No Chart Data Table is needed. Put A23 to A32 in the Label format and then select A23 to A32, D23 to D32, and B40 to B49 as a collection. Enter all appropriate titles, legends, formats, and so forth. Enter your name somewhere on the chart. Save the file again as BONDS3. Print the chart.
Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may be called in 4 years at a call price of 1,060. The bond sells for 1,100. (Assume that the bond has just been issued.) a. What is the bonds yield to maturity? b. What is the bonds current yield? c. What is the bonds capital gain or loss yield? d. What is the bonds yield to call?
3. A 6-year Circular File bond pays interest of $80 annually and sells for $950. Par value is $1,000 by assumption. a)What is its coupon rate? (Round your answer to 2 decimal places.) b) What is its current yield? (Round your answer to 2 decimal places.) c) What is its yield to maturity? (Round your answer to 4 decimal places.)
Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place 32. The market price of a $1000 par value, semi-annual payment bond is $956.76. If this bond has 27 yearsremaining to maturity and a yield to maturity of 7.30%, what is the bond’s annual coupon rate? (Record youranswer rounded to 2 decimal places; for example, record 0.1493824 = 14.93824% as 12.94).33. The market price of a $1000 par value, quarterly (i.e., 4 times per year)v payment bond is $928.39. If thebond has 21 years to maturity and an annual coupon rate of 9.20%, what is the bond’s yield-to-maturity?(Record your answer rounded to 2 decimal places; for example, record 0.1493824 = 14.93824% as 12.94).
1.b A 30-year Canada bond is issued with par value of $1,000, paying interest of $60 per year. If market yields increase shortly after the bond is issued, what happens to the following bond's d. Current yield Options: will increase will decrease will not chnage
An investor invested in a 4-years, 4 percent EuroLBP bond sells at par. A comparable risk 4 years, 5.5 percent LBP/dollar dual currency bond pays $666.66 at maturity per LBP1,000,000 of face value. It sells for 1,200,000. Required: Calculate the implied LBP/$ exchange rate at maturity.
Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place 36. What is the yield to maturity of a $1,000 par value bond with a coupon rate of 9.95% (semi-annual couponpayments) that matures in 28 years assuming the bond is currently selling for $1183.13? (Record your answerrounded to 2 decimal places; for example, record 0.1493824 = 14.93824% as 12.94).37. Compute the yield to maturity of a $10,000 par value bond with a coupon rate of 7.5% (quarterly payments –that is, four times per year) that matures in 25 years. The bond is currently selling for $8,767.38. (Record youranswer rounded to 2 decimal places; for example, record 0.1493824 = 14.93824% as 12.94)
Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place 30. Redstar Air plans to issue a $1000 par value, 12-year, quarterly (i.e., 4 times per year) payment bond with anannual coupon rate of 6.52%. If the bond’s yield to maturity is 4.82%, what will Redstar Air’s bond sell for?31. Graystar Air plans to issue a $1000 par value, 24-year, monthly (i.e., 12 times per year) payment bond withan annual coupon rate of 12.2%. If the bond’s yield to maturity is 14.4%, what will Graystar Air’s bond sellfor?
A five-year, 6.5 percent Euroyen bond sells at par. A comparable risk five-year, 8.0 percent yen/dollar dual-currency bond pays $838.33 at maturity. It sells for ¥110,000. What is the implied ¥/$ exchange rate at maturity? Hint: The dual-currency bond pays 8.0 percent on a notional value of ¥100,000, whereas the par value of the bond is not necessarily equivalent to ¥100,000. (Do not round intermediate calculations. Round your answer to 3 decimal places.)
What is the bond equivalent yield on a $1 million T-bill that currently sells at 96.9 percent of its face value and is 344 days from maturity? (Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))
A bank has issued a six-month, $1.0 million negotiable CD with a 0.53 percent quoted annual interest rate (iCD, sp). a. Calculate the bond equivalent yield and the EAR on the CD. b. How much will the negotiable CD holder receive at maturity? c. Immediately after the CD is issued, the secondary market price on the $1 million CD falls to $998,900. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the $1.0 million face value CD. Required A: Bond Equivalent Yield ___ EAR____ (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 3 decimal places.) Required B: CD Holder will receive at maturity_____(Do not round intermediate calculations. Round your answer to nearest whole number.) Required C: Bond Equivalent Yield____ Secondary Market Quoted Yield______ EAR_____ (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 4 decimal places.
Two bonds have par values of $1,000. One is a 4%, 20 year bond priced to yield 9.5%. The other is a(n) 9%, 23 year bond priced to yield 5.0%. Which of these two has the lower price? (Assume annual compounding in both cases.) Question content area bottom Part 1 The price, PV, of the 4%, 20 year bond is $_(Round to the nearest cent.) Part 2 The price, PV, of the 9%, 20 year bond is $(Round to the nearest cent.)