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- Which of these two bonds offers the highest current yield? Which one has the highest yield to maturity? a. A 6.55 percent, 22-year bond quoted at 52.000 b. A 10.25 percent, 27-year bond quoted at 103.625Describe and differentiate between a bonds (a) current yield and (b) yield to maturity. Why are these yield measures important to the bond investor? Find the yield to maturity of a 20-year, 9 percent, 1,000 par value bond trading at a price of 850. Whats the current yield on this bond?You have estimated that the Duration of a particular bond is 20. If the yield to maturity on this bond is 6.5, what is the bond's Modified Duration? Provide your answer correct to TWO decimal places
- You have estimated that the Duration of a particular bond is 18,If the yield to maturity on this bond is 10,1, what is the bond's Modified Duration ?Assume a bond has duration of 2.75 at a required yield of 6%. If the yield were to increase from 6% to 6.75%, by what percent, and in what direction, would the bond’s price change?If the market rate of interest is 15 percent and the bond interest rate is 10%, the bonds will sell at a _______________. If a bonds interest rate is 10 % and the market rate is 8 %, the bonds will sell at a ______________. In computing the carrying amount of a bond, unamortized _____________ is subtracted from the face value of the bond. In computing the carrying amount of a bond, unamortized _______ is added to the face value of the bond. If a bond sells at a _____________, an amount more than the face value of the bond is received on the date of issuance. If a bond sells at a ____________, an amount less than the face value of the bond is received on the date of issuance.
- A bond with 10 years to maturity paying annual interests has an yield of 10.752 percent. The same bond paying semiannual interests would have an yield of 10.724 percent. What is the basis point difference between the two yields?Which of the following four bonds has the least Macaulay duration? A bond with A. 4.75% yield and 40-year maturity. B. 5.25% yield and 30-year maturity. C. 6.75% yield and 20-year maturity. D. 7.25% yield and 10-year maturity.What is a discount ask yield on a bond? if the bond is priced at 1,000 and 80 days to maturity and has a discount ask yield of 3.4%?
- A four-year discount bond has a face value of $1,000 and a price of $925. What is the yield to maturity on the bond?A bond has a Macaulay duration of 12.00 and is priced to yield 10.0%. If interest rates go up so that the yield goes to 10.5%, what will be the percentage change in the price of the bond? Now, if the yield on this bond goes down to 9.5%, what will be the bond's percentage change in price? Comment on your findings.A Rio Tinto corporate bond currently sells for $1,450, which gives it a yield to maturity of 7%. Its convexity is 455. Suppose that if the yield increases by 50 basis points, the price of the bond falls to $1,400. a. What is the modified duration of this bond? b. What is the duration of this bond?
