CORP FIN (LL)+CONNECT+PROCTORIO+180
12th Edition
ISBN: 9781266120343
Author: Ross
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 14QAP
Summary Introduction
To calculate: Coupon rate, bid price, and the previous day’s asked price.
Introduction: The interest rate that bond issuers pay on the bond's face value is known as the coupon rate. A bid price is an amount that someone is willing to pay for a security, asset, commodity, service, or contract, among other things. An increase or decrease in the value of a security or other asset is known as a price change in the stock market. The phrase can also be used to describe the variation in a stock's closing price from one trading day to the next.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Refer to Figure and look at the Treasury bond maturing in February 2036.a. How much would you have to pay to purchase one of these bonds?
b. What is its coupon rate?
c. What is the yield to maturity of the bond?
You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All
of the bonds have a par value of $1,000 and pay semiannual coupons.
Rate
??
6.252
6.163
Maturity
Month/Year
May 36
May 41
May 51
a. Asked price
b. Bid price
Bid
Asked
103.5462
103.5340
104.4952 104.6409
??
??
Change Ask Yield
+.3015 5.999
+.4293
??
+.5405
4.031
a. In the above table, find the Treasury bond that matures in May 2051. What is the asked price of this bond in dollars?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. If the bid-ask spread for this bond is .0654, what is the bid price in dollars?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All
of the bonds have a par value of $1,000 and pay semiannual coupons.
Rate
??
6.302
6.168
Maturity
Month/Year
May 29
May 32
May 38
Yield to maturity
Asked
Bid
103.4625
103.5353
104.4965 104.6422
??
??
In the above table, find the Treasury bond that matures in May 2032. What is your yield to maturity if you buy this bond?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
=
Change Ask Yield
+.3028 6.019
??
+.4305
+.5418
4.051
%
Chapter 8 Solutions
CORP FIN (LL)+CONNECT+PROCTORIO+180
Ch. 8 - Prob. 1CQCh. 8 - Prob. 2CQCh. 8 - Prob. 3CQCh. 8 - Yield to Maturity Treasury bid and ask quotes are...Ch. 8 - Coupon Rate How does a bond issuer decide on the...Ch. 8 - Real and Nominal Returns Are there any...Ch. 8 - Prob. 7CQCh. 8 - Prob. 8CQCh. 8 - Term Structure What is the difference between the...Ch. 8 - Crossover Bonds Looking back at the crossover...
Ch. 8 - Municipal Bonds Why is it that municipal bonds are...Ch. 8 - Prob. 12CQCh. 8 - Treasury Market Take a look back at Figure 8.4....Ch. 8 - Prob. 14CQCh. 8 - Bonds as Equity The 100-year bonds we discussed in...Ch. 8 - Bond Prices versus Yields a. What is the...Ch. 8 - Interest Rate Risk All else being the same, which...Ch. 8 - Prob. 1QAPCh. 8 - Prob. 2QAPCh. 8 - Prob. 3QAPCh. 8 - Prob. 4QAPCh. 8 - Prob. 5QAPCh. 8 - Prob. 6QAPCh. 8 - Prob. 7QAPCh. 8 - Prob. 8QAPCh. 8 - Prob. 9QAPCh. 8 - Prob. 10QAPCh. 8 - Prob. 11QAPCh. 8 - Prob. 12QAPCh. 8 - Prob. 13QAPCh. 8 - Prob. 14QAPCh. 8 - Prob. 15QAPCh. 8 - Prob. 16QAPCh. 8 - Prob. 17QAPCh. 8 - Prob. 18QAPCh. 8 - Prob. 19QAPCh. 8 - Prob. 20QAPCh. 8 - Prob. 21QAPCh. 8 - Prob. 22QAPCh. 8 - Prob. 23QAPCh. 8 - Prob. 24QAPCh. 8 - Prob. 25QAPCh. 8 - Prob. 26QAPCh. 8 - Prob. 27QAPCh. 8 - Prob. 28QAPCh. 8 - Prob. 29QAPCh. 8 - Prob. 30QAPCh. 8 - Prob. 31QAPCh. 8 - Prob. 32QAPCh. 8 - Prob. 33QAPCh. 8 - Prob. 34QAPCh. 8 - Prob. 35QAPCh. 8 - Prob. 1MCCh. 8 - Prob. 3MCCh. 8 - Prob. 5MCCh. 8 - Prob. 6MCCh. 8 - Prob. 7MC
Knowledge Booster
Similar questions
- You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 6.152 6.153 Maturity Month/Year May 35 May 38 May 44 Bid 103.4586 104.4926 ?? Yield to maturity Asked 103.5314 % 104.6383 ?? Change Ask Yield +.3274 5.959 ?? 3.991 In the above table, find the Treasury bond that matures in May 2038. What is your yield to maturity if you buy this bond? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. +.4269 +.5379arrow_forwardYou find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 5.774 6.218 Maturity Month/Year May 33 May 36 May 42 Bid Asked 103.5483 103.4755 104.5095 104.6552 ?? ?? Yield to maturity In the above table, find the Treasury bond that matures in May 2036. What is your yield to maturity if you buy this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Change Ask Yield +.3158 6.219 ?? +.4425 +.5548 4.251 % Karrow_forwardYou find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 6.252 6.163 Maturity Month/Year May 36 May 41 May 51 Bid 103.5462 104.4952 ?? Asked 103.6340 104.6409 ?? Change Ask Yield +.3015 2.329 +.4293 +.5405 ?? 4.031 In the above table, find the Treasury bond that matures in May 2036. What is the coupon rate for this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.arrow_forward
- Consider a T-bond maturing in March 2020 with coupon payments on September 1st and March 1st. Assume that the bond has $1000 par value, 10% coupon rate, and YTM = 12.5%. The bond is traded on December 13, 2013. What is the Accrued Interest? What is the full price? What is the flat price?arrow_forwardYou find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 5.774 6.218 Maturity Month/Year May 33 May 36 May 42 Bid 103.4755 Asked 103.5483 104.5095 104.6552 ?? ?? In the above table, find the Treasury bond that matures in May 2036. What is your yield to maturity if you buy this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Yield to maturity Change Ask Yield +.3158 6.219 ?? +.4425 +.5548 4.251 Answer is complete but not entirely correct. 4.98%arrow_forwardYou find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate 77 5.674 6.208 Maturity Month/Year May 35 May 40 May 50 Bid Asked 103.5457 103.5579 104.5069 104.6526 22 27 a. Asked price b. Bid price Change +.3132 +.4401 +.5522 Ask Yield 6.179 ?? 4.211 a. In the above table, find the Treasury bond that matures in May 2050. What is the asked price of this bond in dollars? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. If the bid-ask spread for this bond is 0588, what is the bid price in dollars? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.arrow_forward
- A Treasury bond that settles on August 10, 2022, matures on May 4, 2028. The coupon rate is 5.8 percent and the quoted price is 109 15/32. What is the bond’s yield to maturity?arrow_forwardYou find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Asked Rate ??question mark 5.524 6.193 Maturity Month/Year May 34 May 37 May 43 Bid 103.4690 104.5030 ??question mark 103.5418 104.6487 ??question mark Change Ask Yield +.3093 6.119 +.4365 ?? +.5483 4.151 In the above table, find the Treasury bond that matures in May 2037. What is your yield to maturity if you buy this bond?arrow_forwardL You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 5.324 6.173 Maturity Month/Year May 30 May 33 May 39 Bid Asked 103.4638 103.5366 104.4978 104.6435 ?? ?? Change Ask Yield +.3041 +.4317 +.5431 In the above table, find the Treasury bond that matures in May 2033. What is your yield to maturity if you buy this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. X Answer is complete but not entirely correct. Yield to maturity 8.28 % 6.039 ?? 4.071arrow_forward
- Consider the prices of the following three Treasury issues as of February 24, 2021: Maturity Bid Change Yield -15 5.34 May 2025 May 2025 Ask 118:16 118:18 103:16 103:18 134:20 134:26 -5 5.30 May 2025 -15 5.38 Coupon 6.920 8.370 12.180 The bond in the middle is callable in February 2022. What is the implied value of the call feature? (Hint: Is there a way to combine the two non-callable issues to create an issue that has the same coupon as the callable bond?) (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Call value GA 19.41arrow_forwardYou find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Maturity Rate Month/Year Bid Asked Change Ask Yield IT4937 May 30 103.4638 103.5366 +.3041 May 33 104.4978 104.6435 +.4317 ?? ?? ?? 5.324 6.173 May 39 Yield to maturity +.5431 % 6.039 ?? In the above table, find the Treasury bond that matures in May 2033. What is your yield to maturity if you buy this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 4.071arrow_forwardYou find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Rate ?? 6.252 6.163 Maturity Month/Year May 37 May 40 May 46 Bid 103.4612 104.4952 Yield to maturity Asked 103.5340 % 104.6409 ?? Change +.3015 +.4293 +.5405 In the above table, find the Treasury bond that matures in May 2040. What is your yield to maturity if you buy this bond? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Ask Yield 5.999 ?? 4.031arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education