1. A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon and sells for $980. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. ___________% b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.____________% 2. Assume that the risk-free rate is 6% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 1.5? Round your answer to two decimal places.
1. A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon and sells for $980. a. What is its yield to maturity (YTM)? Round your answer to two decimal places. ___________% b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.____________% 2. Assume that the risk-free rate is 6% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 1.5? Round your answer to two decimal places.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 11P
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Please answer ALL OF QUESTIONS 1 AND 2
1. A bond has a $1,000 par value, 10 years to maturity, and an 8% annual coupon and sells for $980.
a. What is its yield to maturity (YTM)? Round your answer to two decimal places. ___________%
b. Assume that the yield to maturity remains constant for the next 3 years. What will the price be 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.____________%
2. Assume that the risk-free rate is 6% and the required return on the market is 8%. What is the required
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