lolanda purchased a Treasury bond with a coupon rate of 2.62% and face value of $100. The maturity date of the bond is 15 April 2029. (a) Luciana plans to purchase lolanda's Treasury bond on 10 April 2018. What price will Luciana pay (rounded to four decimal places)? Assume a yield of 5% p.a. compounded half-yearly. O a. 79.9927 O b. 79.9949 Oc. 80.6850 O d. 80.0492

lolanda purchased a Treasury bond with a coupon rate of 2.62% and face value of $100. The maturity date of the bond is 15 April 2029. (a) Luciana plans to purchase lolanda's Treasury bond on 10 April 2018. What price will Luciana pay (rounded to four decimal places)? Assume a yield of 5% p.a. compounded half-yearly. O a. 79.9927 O b. 79.9949 Oc. 80.6850 O d. 80.0492

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 16P

See similar textbooks

Similar questions

Iolanda purchased a Treasury bond with a coupon rate of 4.59% and face value of $100. The maturity date of the bond is 15 April 2029. (a) Luciana plans to purchase Iolanda's Treasury bond on 12 April 2018. What price will Luciana pay (rounded to four decimal places)? Assume a yield of 2.54% p.a. compounded half-yearly. a. 119.5663 b. 119.5414 c. 119.5404 d. 118.7648
Loïc is planning to purchase a Treasury bond paying a (j2) coupon rate of 4.94% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033; the bond matures at par. If Loïc purchased this bond on 8 March 2020, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 9.32% p.a., compounded half-yearly. Loïc needs to pay 11.1% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half-year.
Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j2 = 1.69% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January, 2025. The yield rate is assumed to be j2 = 10.9% p.a. Assume that this corporate bond has a 6% chance of default in any six-month period during its term. Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to three decimal places. Answer a. $59.319 b. $81.541 c. $80.092 d. $53.631
Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j2 = 6.96% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January, 2025. The yield rate is assumed to be j2 = 2.2% p.a. Assume that this corporate bond has a 11% chance of default in any six-month period during its term. Assume, also, that, if default occurs, Georg will receive no further payments at all. Calculate Georg's purchase price. Round your answer to three decimal places.
Giuseppe is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 2.68% and face value of $100. The maturity date of the bond is 15 May 2033. If Giuseppe purchased this bond on 2 May 2018, what is his purchase price (rounded to four decimal places)? Assume a yield rate of 1.94% p.a. compounded half-yearly, allowing for taxation. Giuseppe needs to pay tax at rate 21.9% on coupon payments. Assume the tax on coupon is paid immediately on the coupon payment date. a. 101.9133 b. 102.9603 c. 102.9591 d. 102.9019
Siggi is planning to purchase an Australian Treasury bond with a coupon rate (j2) of 2.22% p.a. and face value of $100. The maturity date of the bond is 15 May 2033. If Siggi purchased this bond on 4 May 2018, what is her purchase price (rounded to four decimal places)? Assume a yield rate of 1.84% p.a. compounded half-yearly. Siggi needs to pay 28.3% of coupon payments and capital gains in tax payments. Assume that all tax payments are paid immediately. Question 11Answer a. $105.9890 b. $95.8030 c. $76.0108 d. $96.8161
Chloe is planning to purchase a Treasury bond paying a (j2) coupon rate of 4.05% p.a. The face value of the bond is $100. Its maturity date is 15 March 2033; the bond matures at par. If Chloe purchased this bond on 6 March 2020, what is her purchase price (rounded to four decimal places)? Assume a yield rate of 3.74% p.a., compounded half-yearly. Chloe needs to pay 26% of coupon payments and capital gains in tax. Assume that all tax payments are delayed by a half-year. a. $91.1196 b. $78.2736 c. $92.9081 d. $105.0643.
Today is 1 July 2021, William plans to purchase a corporate bond with a coupon rate of j2 = 3.65% p.a. and face value of 100. This corporate bond matures at par. The maturity date is 1 January 2024. The yield rate is assumed to be j2 = 4.5% p.a. Assume that this corporate bond has a 9.6% chance of default in any six-month period during the term of the bond. Assume also that, if default occurs, William will receive no further payments at all. Calculate the purchase price for 1 unit of this corporate bond. Round your answer to three decimal places. a.99.016 b.97.191 c.55.030 d.60.418
Aeri Lee is looking to invest in a two-year bond from Aegyo Productions Corporation. The company makes semi-annual coupon payments of $74.00 (every 6 months) with a face value of $1,000. If the market price of the bonds is $1,047.00, what yield to maturity will Aeri earn (express as an EAR)?f
On 5th December 2020, Jerome purchases a government bond worth $400, with a maturity of 3 years, face value of $500, and a coupon rate of 5% paid annually. The first coupon payment will be received a year from now (i.e., on 5th December, 2021). The yield to maturity offered by equally risky bonds is currently 7%. Such a yield to maturity stays constant over the next two years. On 5th December 2022, Jerome decides to sell this bond after receiving the second coupon payment. It turns out that, on that day, the new yield to maturity offered by equally risky bonds is 1.5%. At what price will Jerome be able to sell his bond?
Consider an investor who, on January 1, 2XX1, purchases a TIPS bond with an original principal of $174,000, an 9 percent annual coupon rate, and 17 years to maturity.If the semiannual inflation rate during the first six months is 0.5 percent and the semiannual inflation rate for the second six-month period is 1.7 percent, calculate the coupon payment to the investor for the second six-month period. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
Qing bought an Australian Treasury bond with a coupon rate of j2 = 2.57% p.a. and a face value of $100. The maturity date of the bond is 15 May 2033. If Qing purchased this bond on 6 May 2018, what was his purchase price (rounded to four decimal places)? Assume a purchase yield of j2 = 2.92% p.a. a. $96.9884 b. $96.9895 c. $97.1016 d. $95.7043