Roy Orbison wants to invest in a 3-year Treasury bond with a 1.90% coupon interest rate. He'd like to earn a yield to maturity of 1.80%. The most he should pay per $100 in face value to earn this yield is:
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A: Using excel PV function to calculate price of the bond
Roy Orbison wants to invest in a 3-year Treasury bond with a 1.90% coupon interest rate. He'd like to earn a yield to maturity of 1.80%. The most he should pay per $100 in face value to earn this yield is:
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- Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments ata rate of 5.875 percent. If these bonds have a market price of $981.13, what is the yield to maturity and effective annual yield can she expect to earn?He bought a 5-year bond with a semi-annual 10% coupon. If you require a yield (Yield-to-Maturity) of 11.12%. What is the price you are willing to pay isYou'd like to buy a 20-year, noncallable bond with an annual coupon rate of 8.4% paid semi-annually. The bond has a par value of $1,000. If you require an 8.25% nominal yield to maturity on this investment, what should you be willing to pay for the bond?
- You are considering the purchase of a 25-year bond with a coupon rate of 11.5 percent. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require a 6.45 percent yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 6.19 percent. If these bonds have a market price of $891.84, what yield to maturity and effective annual yield can she expect to earn?Diane Carter is interested in buying a five-year zero coupon bond with a face value of $1,000. She understands that the market interest rate for similar investments is 9 percent. Assume annual coupon payments. What is the current value of this bond?
- suppose you purchase a 30-year Treasury bond with a 5% annual coupon, initially trading at par. In 10 years' time, the bond's yield to maturity has risen to 6% (EAR). (Assume $100 face value bond.) a. If you sell the bond now, what internal rate of return will you have earned on your investment in the bond? b. If instead you hold the bond to maturity, what internal rate of return will you earn on your initial investment in the bond? c. Is comparing the IRRs in (a) versus (b) a useful way to evaluate the decision to sell the bond? Explain. 1. If you sell the bond now, what internal rate of return will you have earned on your investment in the bond? The IRR of the bond is nothing%. (Round to two decimal places.)You are considering the purchase of a 20-year bond with an annual coupon rate of 9.5%. The bond has a face value of $1,000. You require a 12% nominal yield to maturity on this investment. If the bond makes annual interest payments, what is the maximum price you should be willing to pay for the bond? If the bond makes semiannual interest payments, what is the maximum price you should be willing to pay for the bond?You are considering the purchase of a 20-year, noncallable bond with a coupon rate of 8.0%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 12% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
- I would like to know how to work this problem in excel please. ..A semi - annual bond has a face value of $1,000, an annual coupon rate of 4.60%, a yield to maturity of 8.1%, makes 2 (semi-annual) coupon payments per year, and 10 periods to maturity ( or 5 years to maturity). Determine the price of this bond.I would like to know how to work this problem in excel please....Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has face value of $1,000 and makes semiannual interest payments. If you require an 11.0% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?Assume you have a 1-year investment horizon and are trying to choose among threebonds. All have the same degree of default risk and mature in 10 years. The first is azero-coupon bond that pays $1,000 at maturity. The second has an 8% coupon rateand pays the $80 coupon once per year. The third has a 10% coupon rate and paysthe $100 coupon once per year.1. If all three bonds are now priced to yield 8% to maturity, what are their prices?2. If you expect their yields to maturity to be 8% at the beginning of next year, whatwill their prices be then? What is your before-tax holding-period return on eachbond? If your tax bracket is 30% on ordinary income and 20% on capital gainsincome, what will your after-tax rate of return be on each?3. Recalculate your answer to (2) under the assumption that you expect the yields tomaturity on each bond to be 7% at the beginning of next year.
