What is the present value of a security that will pay $7,000 in 20 years if securities of equal risk pay 7% annually? Do not round intermediate calculations. Round your answer to the nearest cent.
Q: A 2-year Treasury security currently earns 1.79 percent. Over the next two years, the real risk-free…
A: Maturity risk premium can be defined as the additional benefit an investor can earn on bonds having…
Q: What is the present value of a security that will pay $14,000 in 20 years if securities of equal…
A: Present value is the value of the amount in current times that is expected to be received in future…
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Q: has a $1,000 par value, 10 years to maturity, and an 8% annual coupon and sells for $980. a. What is…
A: Par value =$1000 Time =10 years Coupon rate =10% So, coupon payment =0.1*1000 =$100 Present values…
Q: What is the present value of a security that will pay the amount shown below in 20 years? Securities…
A: Present value refers to the current valuation for a future sum. Investors determine the present…
Q: What would be the price of 10 years bond with face value Rs 1000, coupon rate of 10% and required…
A: Bond is a fixed income instrument, debt instrument by investor to a borrower.
Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300…
A: The present value is the present market price of a certain amount which is carrying the expected…
Q: A two-year Treasury security currently earns 1.94%. Over the next two years, the real risk-free rate…
A: Here, 2-year Treasury security yield = 1.94% Real risk-free rate = 1.00% Inflation premium = 0.50%…
Q: You have $5,000 to invest for the next year and are considering three alternatives:a. A money market…
A: We can explain the role that our forecast of future interest would play in our decisions as follows:
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A: given GIC is 5%. The bond you want to use is a 15-year, 5% annual coupon rate bond (semiannually…
Q: You have $25 million to invest in only one of two bonds in the market labeled Bond A and Bond B.…
A: Investment Condition:Invest in only of these two bonds. Assumption: The face value of each bond is…
Q: What would be the price of 10 years bond with face value Rs 5000, coupon rate of 10% and required…
A: One of the methods of bond valuation is the discounting cash flow method. Under this method, all the…
Q: What is the present value of a security that will pay $40,000 in 20 years if securities of equal…
A: Calculate the present value as follows: Present value = Future value / (1+rate)^years
Q: What is the present value of a security that will pay $3,000 in 20 years if securities of equal risk…
A: The Formula to Calculate the Present Value =Future Value x 1/(1 + Rate of Interest)^Period (in…
Q: A zero coupon bond will be worth $15,000 when it matures and redeemed after 10 years. How much would…
A: This question requires us to calculate Present Value of a zero coupon bond which will be worth $…
Q: What is the present value of a security that will pay $5000 in 20 years if securities of equal risk…
A: Calculation of Present Value:The present value is $1,292.10. Excel Spreadsheet:
Q: If the interest rate is 4 percent, what is the present value of a security that pays you $100 two…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: a. What is the present value of a security that will pay $4,000 in 20 years if securities of equal…
A: a) Present value = Future value /(1+rate)^years
Q: What is the present value of a security that will pay $14,000 in 20 years if securities of equal…
A: The Present Value of a security is the present worth of an amount to be received at a future date.…
Q: Phil Manufacturing, Inc. bonds have a face value of $1,000, a coupon rate of 6.5 percent, semiannual…
A: The term bonds refer to the debt instruments that are issued with a motive to raise debt from the…
Q: What is the present value of a security that will pay 5, 000 in 20 years if securities of equal risk…
A: solution given Future value 5000 Number of years 20 Interest rate 7% Present…
Q: A company plans to borrow $10 million for 90 days, 180 days from today. The type of FRA and the…
A: A forward rate agreement between two parties where the interest on a notional principal is…
Q: The real risk-free rate is 2.5% and inflation is expected to be 2.75% for the next 2 years. A 2-year…
A: “Hey, since there are two different questions are posted, we will answer first question. If you want…
Q: A security that is selling for $1,500 and promises to pay annual interest of $130 forever would have…
A: Given details are : Current price of Security = $1500 Annual Interest = $130 Security provides…
Q: What is the present value of a security that will pay $29,000 in 20 yearsif securities of equal risk…
A: Present Value is a current value of a future payment. Future cash flows are discounted at the…
Q: What is the present value of a security that will pay $5000 in 20 years if the securities of equal…
A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…
Q: What is the maximum price you will pay for a bond with a face value of $1,000 and a coupon rate of…
A: Bond value is the present value of all the cash flows a bond will generate in its lifetime assuming…
Q: Your company currently has $1,000 par, 6.5% coupon bonds with 10 years to maturity and a price of…
A: COUPON RATE for the bond to be sold at par is the YTM. GIVEN, n= 10 pv = -1078 coupon rate = 6.5%…
Q: What is the present value of a security that will pay $22,000 in 20 years if securities of equal…
A: Future value is total of initial investment plus compound interest on that. Compound interest could…
Q: Suppose that for a price of $960 you purchase a 7-year Treasury bond that has a face value of $1,000…
A: Rate of Return = Coupon + Capital AppreciationTotal Investmentx100
Q: present value of a security
A: The present value is the computations used under the concept of the time value of money, where the…
Q: A security that is selling for $3,000 and promises to pay annual interest or $250 forever would have…
A: Calculation of annual yield:Answer:The annual yield of security is 8.333%.
Q: At what annual interest rate would the following have to be invested? i) $500 to grow to $1,948.00…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: What should the current market price be for a bond with a $1,000 face value, a 10% coupon rate paid…
A: I/Y = rate = 12% NPER = Number of years = 20 PMT = Coupon = -1000*10% = -100 FV = Future value or…
Q: What is the present value of a security that will pay $32,000 in 20 years if securities of equal…
A: We need to use the concept of time value of money to solve the question. According to the concept of…
Q: Suppose you borrow $10,000,000 in the interbank money market at a KLIBOR yield of 6% pa for a term…
A: First of all, we need to understand the meaning of forward rate agreement- It is an agreement…
Q: What would you pay for a $100,000 debenture bond that matures in 15 years and pays $10,000 a year in…
A: Given details are: Par value of bond (FV) = $100000 Maturity period (n) = 15 years Annual Interest…
Q: An insurance company must make payments to a customer of $10 million in one year and $4 million in…
A: Here, The interest rate or yield curve is 'r' Duration of payment is 't'
Q: Suppose investors can earn a return of 1.9% per 6 months on a Treasury note with 6 months remaining…
A: Given: Interest rate = 1.9% Periods = 1 Face value = $10,000
Q: What is the present value of a security that will pay $18,000 in 20 years if securities of equal…
A: Present value is the value of the money in current time that is expected to be received in future…
Q: Suppose on can invest in a money market instrument that matures in 70 days that offers 8% nominal…
A: Nominal rate (r) = 8% Period = 70 Days Number of days in a year = 365 days Number of compounding per…
Q: What is the present value of a security that will pay $3,000 in 20 years if securities of equal risk…
A: Present Value: It is the present worth of the future amount and is estimated by discounting the…
Q: Assuming away any risk differential of investing in a two-year security for two years or a on-year…
A: The question posted above assumes that there is no compounding of interest i.e. it is based on…
Q: You are managing a portfolio of $1 million. Your target duration is 10 years, and you can invest in…
A: The question is based on the concept of portfolio duration, which is calculated as the weighted…
Q: What is the present value of a security that will pay $17,000 in 20 years if securities of equal…
A: Present value of a single sum can be calculated by using this equation Present value =Future…
Q: What is the most we should pay for a bond with a par value of $1000, coupon rate of 4.2% paid…
A: The most that we should pay for a bond is its present value. Present value of a bond is essentially…
Q: lient invests $2 million in a security that matures in 4 years and pays 7.5 percent annual interest…
A: The given problem can be solved using FV function in excel. FV function computes amount value in…
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- What is the present value of a security that will pay $17,000 in 20 years if securities of equal risk pay 8% annually? Do not round intermediate calculations. Round your answer to the nearest cent.What is the present value of a security that will pay $18,000 in 20 years if securities of equal risk pay 8% annually? Round your answer to the nearest cent.What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7%?
- What is the present value of a security that will pay $29,000 in 20 yearsif securities of equal risk pay 5% annually?What is the present value of a security that will pay $5000 in 20 years if securities of equal risk pay 7 percent annually?What is the present value of a security that will pay $10,000 in 5 years if securities of equal risk pay 3.5% annually? What is the present value of a security that will pay $3,000 in 10 years if securities of equal risk pay 12% annually? What is the present value of a security that will pay $10,000 in 3 years if securities of equal risk pay 5% annually? What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually? What is the present value of a security that will pay $8,989 in 13 years if securities of equal risk pay 22% annually? What is the present value of a security that will pay $1,989 in 22 years if securities of equal risk pay 13% annually?