Riley purchased a bond for 900 5 years ago. The bond rate is 2 percent and the face value is 1,000. What should the selling price be in order to obtain a yield of 1 percent?
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Riley purchased a bond for 900 5 years ago. The bond rate is 2 percent and the face value is 1,000. What should the selling price be in order to obtain a yield of 1 percent?
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- Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?James Smith bought 10-year bonds issued by Harvest Foods five years ago for $930.00. The bonds make semiannual coupon payments at a rate of 8.0 percent. If the current price of the bonds is $1,040.77, what is the yield that James would earn by selling the bonds today?Four years ago, Sandra Stills bought six-year, 5.5 percent coupon bonds issued by the Oriole Corp. For $944.99 she sells these bonds at the current price of $892.26, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. Assume face value is $1000. (Round to 2 decimal places)
- A $9,000 bond had a coupon rate of 4.50% with interest paid semi-annually. Erin purchased this bond when there were 7 years left to maturity and when the market interest rate was 4.75% compounded semi-annually. He held the bond for 3 years, then sold it when the market interest rate was 4.25% compounded semi-annually. a. What was the purchase price of the bond? b. What was the selling price of the bond? c. What was Erin's gain or loss on this investment?. Please explain all three subparts. I will really upvoteEren purchased a bond, costing 890, three years ago, with a current price of 925. This bond paid 100 year as interest payments ( end of each year). She wants to hold the bond for 4 more years and it is expected to be sold at the end of year four at 960. It is also expected that there will be no default of yearly interest payments. Assuming that the required rate of return is 11.25%. Compute the price of the bond?A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate. It currently has 15 years remaining to maturity. Interest rates on similar obligations are now 8 percent. What is the current price of the bond? (Look up the answer in Table 16–2.) Assume Ms. Bright bought the bond three years ago when it had a price of $1,050. What is her dollar profit based on the bond’s current price? Further assume Ms. Bright paid 30 percent of the purchase price in cash and borrowed the rest (known as buying on margin). She used the interest payments from the bond to cover the interest costs on the loan. How much of the purchase price of $1,050 did Ms. Bright pay in cash? What is Ms. Bright’s percentage return on her cash investment? Divide the answer to part b by the answer to part c. Explain why her return is so high?
- manuel bought a $100,000 bond with a 5.7% coupon for $92,470 when it had seven years remaining to maturity. what was the prevailing market rate at the time manuel purchased the bond?Manuel bought a $100,000 bond with a 5.2% coupon for $92,420 when it had five years remaining to maturity. What was the prevailing market rate at the time Manuel purchased the bond?Manuel bought a $100,000 bond with a 5.5%coupon for $92,450 when it had five years remaining to maturity. What was the prevailing market rate at the time Manuel purchased the bond? Bond interest is paid semi-annually The bond was originally issued at its face value Bonds are redeemed at their face value at maturity Market rates of return and yields to maturity are compounded semiannually.
- Four years ago, Lisa Stills bought six-year, 9.50 percent coupon bonds issued by the Fairways Corp. for $947.68. If she sells these bonds at the current price of $877.07, what will be her realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon payments. (Round answer to 2 decimal places, e.g. 15.25%.) Realised rate of return %Four years earlier, Janice purchased a $1,000 face value corporate bond with a 6% annual coupon and maturing in 10 years. At the time of the purchase, it had an expected yield to maturity of 8.76%. If Janice sold the bond today for $1,088.39, what rate of return would she have earned for the last four years?Seven years ago, a semi-annual coupon bond with a 10% coupon rate, $1,000 face value and 15 years to maturity was issued by Corn Inc. Teddy bought this bond two years ago when the market interest rate was 12%. And now the market interest rate is 5%. If teddy sells the bond now, what is Teddy’s capital gain/loss yield on the bond investment? Find the initial purchase price and selling price, then determine the yield.
