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If you were to purchase a bond for $1,100 that paid $50 per year in dividends, what will be the current yield of your bond?
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- Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for fouryears, and sell it immediately after receiving the fourth coupon. If the bond’s yield to maturitywas 5% when you purchased and sold the bond,a. What cash flows will you pay and receive from your investment in the bond per $100 face value?b. What is the internal rate of return of your investment?You bought a 10-year, 5% coupon bond for $1,000 and sold it 1 year later for $1,100. The bond pays interest annually. If your marginal tax rate is 30%, and 50% of capital gains are taxable, what is the after-tax rate of return on your bond investment?A Treasury bond that you own at the beginning of the year is worth $1,100. During the year, it pays $48 in interest payments and ends the year valued at $1,110.What was your dollar return and percent return?
- suppose you purchase a bond with a coupon of $50 for $1010 you sell it one year later for $900 What rate of return did you earn?Suppose you purchase a 10-year bond with 6.3% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.6% when you purchased and sold the bond, A)What cash flows will you pay and receive from your investment in the bond per $100 face value? B)What is the annual rate of return of your investment?Suppose you purchased a ten-year, 8% coupon bond(annual coupon payment) at $980. Two years later, you decide to take a vacation and sell the bond to acquire the necessary funds. At the time you sell the bond, eight-year bonds with similar characteristics sell for yields of 9%. What is your realized yield on the bond?
- You purchased a $1000 20-year bond with a 5 year call provision. If the bond pays $95 annually and the present value of the bond is $850, what is the yield to call?Suppose you purchase a 10-year 5% (semi-annual pay) coupon bond. You plan to hold the bond for six months and then sell it. If the bond’s yield to maturity was 4% when you purchased and sold the bond, what cash flows will you pay and receive from your investment in the bond per $1000 face value?Suppose you purchase a 10-year bond with 6.5% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 5.3% when you purchased and sold th bond, what is the rate of return of your investment?
- How much would an investor pay to purchase a bond today, which is redeemable in four years for its nominal value or face value of $100 and pays an annual coupon of 5% on the nominal value? The required rate of return (or yield) for a bond in this risk class is 4%.You have paid $120 for an 5.5% coupon bond with a face value of $1,000 that matures in five years. You plan on holding the bond for one year. If you want to earn a 5.5% rate of return on this investment, what price must you sell the bond for?Please calculate the value of a 5%, 10-year bond with a par (and redemption) value of $10,000 that pays dividends annually, if the investor would like to earn a 6% return.
