Assume that there is a bond that pays $50 at the and of year 1 and $50 at the end of year 2. It sells at $100. The Macauley duration of the bond is
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Assume that there is a bond that pays $50 at the and of year 1 and $50 at the end of year 2. It sells at $100. The Macauley duration of the bond is
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- Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 percent, the future value of the bond (the amount the bond pays in one year) is * P1,560.00 P1,540.00 P1,440.00 P1,442.31Assume that a bond makes 30 equal annual payments of \$1,000$1,000 starting one year from today. (This security is sometimes referred to as an amortizing bond.) If the discount rate is 3.5\%3.5% per annum, what is the current price of the bond?The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 11 years until maturity. You can purchase the bond for $1,155. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 3 percent?
- According to the theory, premium bonds, discount bonds, and face value bonds at the expiry date will have a value of $1,000. Why is the value is $1,000 at the expiring day? Explain.You purchase a $10,000 bond with a bond rate of 6% per year payable semiannually for 2 years. You pay $9,600 for the bond. Which statement is correct?A bond matures in 20 years, at which time it pays the owner $1,000. It also pays $70 at the end of each of the next 20 years. If similar bonds are currently yielding 7%, what is the market value of the bond? Select one:cannot be determined from the information givenexactly $1,000under $1,000over $1,000
- An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is five percent, what is the current market value of the bond?The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 12 years until maturity. You can purchase the bond for $955. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 11 percent?If the amount of a bond premium on an issued 11%, four-year, $100,000 bond is $12,928, the annual interest expense is $5,500.
- You have the following information regarding an annual bond. What is the modified duration of this bond? Payment $40 YTM 6.5% Maturity (in years) 19 Par value $1,000A 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?Find the bond premium and purchase price on a P2,000 bond with interest at 2% compounded semi-annually, redeemable at par for 8years, if it is to yield 4% compounded semi-annually