Bond C has a $1,000 face value and provides an 8% annual coupon for 30 years. The appropriate discount rate is 10%. What is the value of the coupon bond?
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Bond C has a $1,000 face value and provides an 8% annual coupon for 30 years. The appropriate discount rate is 10%. What is the value of the coupon bond?
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- Consider a bond with a face value of $1,000. The coupon is paid semiannually and the marketinterest rate (effective annual interest rate) is 8 percent. How much would you pay for the bondif a. the coupon rate is 6 percent and the remaining time to maturity is 10 years?b. the coupon rate is 10 percent and the remaining time to maturity is 15 years?Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.5%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timelineConsider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the rate of return of the bond? What is the yield to maturity of the bond?
- A 10-year bond with a face value of $10,000 pays a 5% annual coupon and has a yield (annual interest rate) of 3%. What is the current price of the bond?A 5-year treasury bond with a coupon rate of 8% has a face value of $1,000. What is the semi-annual interest payment?A bond has a $1,000 face value, a market price of $1,115, and pays interest payments of $90 every year. What is the coupon rate?
- Consider a bond with a face value of $1,000. The coupon is paid semiannually and the market interest rate (effective annual interest rate) is 8 percent. How much would you pay for the bond if . the coupon rate is 6 percent and the remaining time to maturity is 10 years? the coupon rate is 10 percent and the remaining time to maturity is 15 years?Consider a bond paying a coupon rate of 10% per year semi-annually when the market interest rate is only 4% per half-year. The bond has three years until maturity. This initial payment is $1000. A: What is find the bond’s price today and 6 months time after the next coupon is paid? B: What is the total rate of return on the bond?You are considering a 10-year, Rs. 1000 par value bond. Its coupon rate is 10% and interest is paidsemiannually. If you require an effective annual interest rate of 8%, how much should you be willingto pay for the bond? Is effective annual interest rate differing from coupon rate? Explain.
- A bond has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. a) If the bond has a yeild to maturity of 9% 1 year from now, what will its price be at that time? b) What will be the rate of return on the bond? c) Now assume that interest is paid semannually. What will be the rate of return on the bond? d) If the inflation rate during the year is 3% what is the real rate of return on the bond?Suppose that a bond has a face value of $200 000 and its maturity date is 10 years from now. The coupon rate is 5% payable semi-annually. Find the fair price of this bond, assuming that the annual market rate is 4%.A bond has 10 years until maturity, a coupon rate of 8.9%, and sells for $1,110. Interest is paid annually. (Assume a face value of $1,000.) What will be the rate of return on the bond?