you expect the inflation rate to be 15 percent next year and a one-year bond has a yied to maturity of 7 percent, then the real interestr rate on this bond is ______%

Q: According to the expectations theory, what will be the interest rate on a three-year bond if the…

A: Expectations theory:- Based on current long-term interest rates, expectations theory tries to…

Q: Suppose a perpetual, annual coupon payable bond. Current interest rate is 9%. Next year, there is a…

A: If coupon  rate is higher than  market rate bonds will trade at higher  price

Q: The one-year spot rate is 8 percent and the two-year spot rate is 10 percent. What is the price of a…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: he bond matures in 10 years, at which time it will pay 1000. If the coupon rate is 7% and discount…

A: The bond price is calculated as present value of cash flows from bond

Q: A bond is priced at $1,100, has 10 years remaining until maturity, and has a 10% coupon, paid…

A: Semi annual coupon bonds pay interest semiannually  and interest is paid on face value not on market…

Q: A Bond has a face value of ₵ 1000 and pays a coupon of 10% annually. It has five-year life. The…

A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: n-paying bond matures exactly 10 years and 4 months from now. Find the bond’s coupon rate if a…

A: Given question : Time period (years) 10.4 Future price 121 Current price 119 Interest rate…

Q: bond matures in 8 years has a par value of $1000 and a annual caupon payment of $70, its market…

A:

Q: Bond X is a premium bon making annual payments. The bond pays 8% coupon, has YTM of 6% and has 13…

A:

Q: A 10-year bond pays an annual coupon, its YTM is 10%, and it currently trades at a par value. Which…

A: YTM is 10%  The bond is trading at par means the price of the bond is the same as the face value of…

Q: There is a goverment bond that pays %16 annual coupon interest however the payments are…

A: The price of the bond refers to the present value of all the future cash flows of that respective…

Q: Consider a bond paying a coupon rate of 10% per year semi-annually when the market interest rate is…

A: Bond price will be Bond price =present value of all coupons +present value of face value…

Q: The current rate of inflation is 3 percent, and long-term Treasury bonds are yielding 7 percent. You…

A: Due to the increase in the inflation rate the required rate of return also increase in the same…

Q: You are considering purchasing a bond between settlement periods with a 6% coupon rate and 4…

A: A bond is a type of financial asset in which the issuer owes the holder a debt and is required to…

Q: You own a $1,000 par value bond with 20 years to maturity that is paying an annual coupon rate of…

A: Price=Coupon Payment×1-1+YTM-nYTM+Face Value1+YTMn

Q: A General Power bond carries a coupon rate of 10.0%, has 9 years until maturity, and sells at a…

A: a). Assuming the Bond Face value = $1000 Annual Interest payment = Coupon rate x Face value of the…

Q: A bond has the following features: Coupon rate of interest (paid annually): 6 percent Principal:…

A: A bond is a loan to a corporation, government agency or other organization to be used for all sorts…

Q: Consider a bond with a face value of $1000. The coupon payment is made semiannually and the yield on…

A: Price of bond = [ PVAIF (Yield rate , periods) * Interest ] + [ PVAF (Yield rate , Period) *…

Q: Calculate the fair present values of the following bonds, all of which pay interest semiannually,…

A: To find the fair present value of the bond we need to find the present value of the coupon payments…

Q: A bond with 18 years to maturity has an annual interest payment of $30. If the bond sells for its…

A: Consider the face value be $1000 So, price of bond = $1000

Q: A bond that matures in 8 years has a par value of 1000 and a annual coupon payment of 70; its market…

A: Using excel PV function to calculate price of the bond.

Q: 00 face value bond has 15 years to maturity and a 7.6% coupon rate (interest is paid annually).  If…

A: Yield to maturity is rate at which present value of coupon payment and present value of par value…

Q: A 30-year, $1,000 par value bond has an annual payment coupon of 7.5%.  The bond currently sells for…

A: The presentation of the interest expense and coupon payments for a bond is different, the interest…

Q: You have the following information regarding an annual bond. What is the modified duration of this…

A: Modified duration of a bond shows the change in the value of the security as the value of the…

Q: What is the market price of a $1,000, 8 percent bond if comparable market interest rates rise to 10…

A: Given, C = coupon payment = $80.00 (Par Value * Coupon Rate)n = number of years = 14r = market rate…

Q: A bond with 18 years to maturity has an annual interest payment of $35. If the bond sells for its…

A: Time to maturity=18 yearsAnnual interest payment=$35 Assume the bond’s par value is to be $1000.…

Q: The yield on a 10-year bond is 7%. The 30-day T-bill yield is 2.5%, while the inflation rate is…

A: Here, Yield on 10 year Bond is 7% T-Bill yield is 2.5% Inflation Rate is 2.3%

Q: According to the expectations theory, what will be the interest rate on a three-year bond if the…

A: Interest rate of long term bonds are higher than short term bonds

Q: Given the following information, what is the approximate convexity measure for the bond if the yield…

A: Formula for approximate Convexity is as below:

Q: bond that matures in 8 years has a par value of $1,000 and an annual coupon payment of $70; its…

A: 1) Solved using Financial Calculator  N = 8 FV = 1000 PMT = 70 I/Y = 9 CPT PV = - 889.30 Bond is at…

Q: uppose a bond has a coupon rate of 9.5%, a remaining maturity of 15 years, and a face value of…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: A 10-year bon have an interest rate of 6.50%, while a 15-year bond have an interest rate of 6.0%.…

A: The expectation theory provides that the return realized from holding either long-term securities or…

Q: What is the yield to maturity on a bond that has a price of $1,600 and pays $100 interest annually…

A: Bond which is selling above par value is called premium bond

Q: he market price is ​$725 for a 9​-year bond ​($1,000 par​ value) that pays 12 percent annual​…

A: A bond is a debt instrument that is issued by the organization to raise the funds from the investor…

Q: A bond with a face value of $1,000 and a 10% coupon rate is going to mature in 15 years. Assuming…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Consider a bond paying an annual coupon of $70 with a face value of $1,000. Calculate the yield to…

A: using financial calculator, N(time to maturity) =18 PV (Price of bond) = -1150 FMT (annual Coupon) =…

Q: A bond is selling in the market for $1,100 and has a duration of 4.5 years. Market interest rates…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: Consider a bond selling at par of $1,000 with a coupon rate of 5% semi-annual coupon payment, and 10…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: What is the price of a 3 year , 8.2% coupon rate ,$1000 face value bond that pays interest quarterly…

A: A financial instrument that does not affect the ownership of the common shareholders or management…

Q: If we are using annual returns and the YTM of a 10 year bond is 5.3% and the YTM of an11 year bond…

A: YTM for 10 years = 5.3% YTM for 11 Years = 5.4%

Q: Bond P is a premium bond with a coupon of 7.8 percent, a YTM of 6.55 percent, and 15 years to…

A: Bonds are the highly secured debt securities for which the company pays interest to the bondholder.…

Q: According to the expectations theory, what will be the interest rate on a three-year bond if the…

A: Expectation theory helps to find an interest rate of long term bonds. are perfect substitutes. This…

Q: A 30-year, $1,000 par value bond has an annual payment coupon of 7.5%. The bond currently sells for…

A: Given: Years = 30 Par value = $1,000 Coupon = 7.5% Current price = $910

Q: Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 7 percent, has a…

A: Price of a bond can be caluclated as the sum of present value of all the coupon payments made and…

Q: bond has a Macaulay duration of 12.00 and is priced to yield 10.0​%. If interest rates go up so that…

A: % Change is price = - Modified Duration *Change in yield = [- 12/(1 + 0.10) ] * 0.5 = (- 12/1.10) *…

Q: A bond has a coupon rate of 8 percent, 7 years to maturity, semiannual interest payments, and a YTM…

A:

Q: A bond that matures in13years has a$1,000par value. The annual coupon interest rate is8percent and…

A: Price / Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv],…

Q: f a bond can be purchased for $60 and has a maturity value at the end of 10 years of $500, what is…

A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.