A five-year bond is issued with a face value of GHC3000. The bond pays coupon semiannually at 10%. The yield to maturity is 8%. Another five-year bond with the same face value provides a coupon of 15% but the yield to maturity is 12.5%. You are required to calculate a) the price of each bond. b) the duration of each bond and the convexity of each bond. c) If interest rate increases by 500 basis points, calculate and identify which bond will experience a higher change in price in terms of percentage and absolute amount. Note no excel solution

Q: The one-year spot rate is 8 percent and the two-year spot rate is 10 percent. What is the price of a…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Consider a bond with 15 years to maturity, a coupon rate of 13% that is paid annually, a face value…

A: Face value = $1000 Coupon rate = 13% Coupon amount = 1000*0.13 = $130 Yield to maturity = 15% Years…

Q: A 10-year, 12 percent semiannual coupon bond, with a par value of $1,000, may be called in 4 years…

A: Bonds are debt instruments issued by the borrowing organization to the investors. Bonds can be…

Q: uppose the yield on a two-year-old Treasury bond is 5 percent and the yield on a one-year…

A: A risk-free bond that is issued by the government, and also has a more than 20 years maturity period…

Q: The face value of a bond is P 100,000 and currently and currently selling at P 134,996.00. The bond…

A: Face value (F) = P 100000 Bond price = P 134996 n = 11 years = 22 semiannual periods r = 4.03% per…

Q: four-year bond has an 8% coupon rate and a face value of $1000.  If the current price of the bond is…

A: Because you have posted multiple questions , we will answer the first question only. For the…

Q: A 12-year bond has a 9 percent annual coupon, a yield to maturity of  8 percent, and a face value of…

A: The bond price is calculated as sum of present value of cash flows

Q: A 15-year bond with 9% coupons paid semi-annually will be redeemed at P 6,300. The bond is bought to…

A: Given: Years = 15 Coupon = 9% Redeemable value = P6,300 Yield = 7.5% Purchase price = P6,750

Q: what is its yield-to-maturity?

A: Bond valuation is a method of finding the fair value of the bond. Fair value means the present…

Q: Hunter-Gratzner Enterprises has issued a bond that has the standard face value of $1000 and carries…

A: Current market price of the bond is the present value of all the future cash flows associated with…

Q: A three-month treasury bill sold for a price of $99.311998 per $100 face value. What is the yield to…

A: Solution : Price (P) = $99.311998 Face value (FV) = $100 time (n) = 3 month or 3/12 = 0.25 year…

Q: llais Company’s bond has an $85 annual interest payment that will mature in 10 years at a value of…

A: The yield of the bond is the required rate of return on the investment made by the bondholders. The…

Q: Consider a bond with a face value of $1000. The coupon payment is made semiannually and the yield on…

A: Price of bond = [ PVAIF (Yield rate , periods) * Interest ] + [ PVAF (Yield rate , Period) *…

Q: You intend to purchase a 2-year bond. The bond has a $1,500 face value and coupon payments are…

A: Given: Year = 2 Interest rate = 4% Market rate = 18% Face value = $1,500

Q: Calculate the fair present values of the following bonds, all of which pay interest semiannually,…

A: To find the fair present value of the bond we need to find the present value of the coupon payments…

Q: A five-year bond is issued with a face value of GHC3000. The bond pays coupon semiannually at 10%.…

A: Duration of bond shows the change in bond price due to change in interest rate. Macaulay duration =…

Q: A RM1,000 bond matures in 10 years has a coupon rate of 8 percent. Calculate the price of this bond…

A: The bonds are issued at premium when market rate is lower than the coupon rate of bonds. The bonds…

Q: A bond with a coupon rate of 8.2% paid semi-annually, maturing in 5 years at a value of $1,000 and a…

A: Solution:- Bond price means the price at which the bond is currently trading in the market. It is…

Q: A five-year bond is issued with a face value of GHC3000.The bond pays coupon semiannually at 10%.…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: You are considering a bond with a coupon rate of 10% per annum. Coupons are paid semiannually. The…

A: Computation:

Q: A bond has just been issued. The bond will mature in 3 years.  The bond’s annual coupon rate is 12%…

A: Bonds refer to the financial instruments which are raised by the institutions for raising funds from…

Q: A bond that matures in 7 years sells for $1,020. The bond has a face value of$1,000 and a yield to…

A: Given information: Face value of bond is $1,000 Price of bond is $1,020 Yield to maturity is…

Q: . You are considering a bond with a coupon rate of 10% per annum. Coupons are paid semiannually. The…

A: GIVEN, COUPON RATE = 10% par=$1000 N=5 r=11% coupon = par x coupon rate x 0.5 = $50 m=2

Q: A 15-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon…

A: Yield to maturity is the return earned by the bond holder by holding bond till maturity.

Q: The yield on a bond is 6% annual. The face value of the bond is $1,000. The bond pays semi-annual…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: Suppose a bond with face and redemption value of $33895 matures in 34 years and has a nominal annual…

A: Face Value  $33,895.00 Coupon Rate 5% Yield 3% Time Period of Bond 34 Years Time Period of…

Q: A bond has a coupon rate of 9%, term to maturity of 5 years and par value of RM1,000. The coupon is…

A: The change in the price of a bond due to a change in the interest rate is measured by bond duration.

Q: A bond has a face value of $1,000, an annual coupon rate of 7 percent, yield to maturity of 10…

A: given, face value = $1000 coupon = 7% YTM = 10% years to maturity = 20

Q: A six-year, semiannual coupon bond is selling for $991.38. The bond has aface value of $1,000 and a…

A: Given,Face Value of Bond (fv) = $1,000Price of Bond (pv) = $991.38Time Period = 6 yearsNumber of…

Q: A bond has a face value of $300 and a coupon rate of 6% p.a., with coupon payments made four times a…

A: On the maturity date the bond issuer will pay the promised face value of the bond along with the…

Q: A three-year bond has 8.0% coupon rate and face value of $1000.  If the yield to maturity on the…

A: A bond is a financial security that is sold by large business entities to raise borrowing funds.…

Q: A bond with 10 years to maturity has a face value of $1,000. The bond can be called in four years…

A: The price of the bond will depend upon the yield, the call price, the time to call and the coupoon.

Q: The current yield on the bond is  b) The yield to maturity of the bond is

A: Current Yield on Bond: It is estimated by dividing the annual coupon payments by the price of the…

Q: Consider a bond paying an annual coupon of $70 with a face value of $1,000. Calculate the yield to…

A: using financial calculator, N(time to maturity) =18 PV (Price of bond) = -1150 FMT (annual Coupon) =…

Q: What is the YTM of a bond with 12 years to maturity, coupon rate of 10% paid annually, par value of…

A: Yield to maturity (YTM) is the discount rate or the rate of return that an investor earns by holding…

Q: The Salem Company bond currently sells for ​$848.55​, has a coupon interest rate of 14​% and a $1000…

A: Given:

Q: The face value of the bond is $10,000 with annual coupon payment. The maturity period is 6 years…

A: The bond duration is used to measure the actual time it takes for the bond to recover its costs…

Q: A bond with a face value of $1,000 has 16 years until maturity, has a coupon rate of 7.8%, and sells…

A: face value = $1000 n= 16 years coupon rate = 7.8% price =$1071

Q: The Mobile Motors Inc. bond has 12 years remaining to maturity. Interest is paid annually, it has a…

A: Current price of the bond is the sum of present value of coupon and the present value of face value.

Q: Mr.Bond has a coupon rate of 5% (interest paid annually) and maturity of 6 years. If the current…

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: You are given the following information aboutr a 20 year bond with face amount 4000. The bond has an…

A: A coupon bond is a debt obligation in which the coupons are also attached.

Q: A $1000 bond with a coupon rate of 6.5% paid semiannually has eight years to maturity and a yield to…

A: Bond Current Price  = C*(((1-(1+r)-n)/r)) + (Mv * (1+r)-n) Where C = Coupon amount  Mv = Maturity…

Q: A bond has just been issued.  The bond has an annual coupon rate of 4% and coupons are paid…

A:

Q: Assume that there is a freshly-issued coupon-bearing bond with a face value of £10,000, which has…

A: Let Sn be the spot rate in year n. Face value (F) = £10000 n = 4 years Coupon (C) = 10% of F = £1000

Q: Dausin Design offers bonds with a coupon rate of 9 percent per year, paid semiannually. The yield to…

A: Solution:- We know, Current Price of a bond = Present Value of Cash Inflows receivables from bond.…

Q: A 10-year bond with a $1,000 face value has a coupon rate of 8 percentpaid semiannually. If current…

A: Bonds are fixed-income assets that serve as a representation of investor loans to borrowers…