Calculate the bond equivalent yield and effective annual return on fed funds that are 23 days from maturity and have a quoted yield of 0.29 percent.
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Calculate the bond equivalent yield and effective annual return on fed funds that are 23 days from maturity and have a quoted yield of 0.29 percent.
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- A recent listing for a Treasury bill gave an Asked Bank Discount Yield (d) of 1.30%. Its maturity was 80 days. a. What is the T-bill's coupon (bond) equivalent yield (y)?Assume that a bond has a current price of $922.32, a coupon rate of 10 percent (pays $50every six months), and a yield-to-maturity of 11 percent. Based on this information, and assuming that rates remain constant, determine by how much the price of this bond will increase over the next 6 months. $1.38 $1.91 $2.63 $1.00 $0.73Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): The timeline starts at Period 0 and ends at Period 20. The timeline shows a cash flow of $ 20.72 each from Period 1 to Period 19. In Period 20, the cash flow is $ 20.72 plus $ 1,000. Period0121920 Cash Flows$20.72$20.72$20.72$20.72+$1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value?
- Please see attached. Definitions: Yield to maturity (YTM) is the return the bond holder receives on the bond if held to maturity. Treasury note is a U.S. government bond with a maturity of between two and ten years. Current yield is the annual bond coupon payment divided by the current price.Consider a bond with one year remaining to maturity, a $1,000 face value, an 8 percent coupon rate (paid semi-annually), and an interest rate (either required rate of return or yield to maturity) of 20 percent. What is the duration of the bond?Calculate the annual interest (in $) and current yield (as a %) of the bond. (Round your percentage to one decimal place.) Company Coupon Rate Annual Interest Market Price Current Yield Company 5 8.25% $ 106.00 %
- What is the purchase price for a bond that is paying 6 percent annual coupon rate in Semi-annual payments if its Yield to Maturity is 10 % and it has 10 years and 10 months from its purchase date until its maturity? What is the accrued interest rate? Assume the bond is traded in a year of 366 days when calculating the accrued interest.What is the discount yield, bond equivalent yield, and effective annual return on a $2 million Treasury bill that currently sells at 99.5 percent of its face value and is 95 days from maturity?The current rate of inflation is 3 percent, and long-term Treasury bonds are yielding 7 percent. You estimate that the rate of inflation will increase to 6 percent. What do you expect to happen to long-term bond yields? Compute the effect of this change in inflation on the price of a 15-year, 10 percent coupon bond with a current yield to maturity of 8 percent.
- Given the following information, compute the rate of return earned on the bond if the bond was sold on the same date next year as it was purchased this year. Coupon rate = 7% p.a. compounded annually Current Market Price = $871.65 Selling Price next year = $880.10 a. 17% b. 7% c. 9%Assume that the credit risk on a 5 year6 percent annual coupon corporate bond is represented by a 1.5 percent annual probability of default and a recovery rate of 25 percent. Assume that the government yield curve is flat at 2.5 percent. Calculate both the credit spread and credit valuation adjustment for the bond. INCLUDE DETAILED CALCULATION***A three-month treasury bill sold for a price of $99.311998 per $100 face value. What is the yield to maturity of this bond expressed as an EAR?