23 Jul IS THE BOND IN QUESTION 6 SELLING FOR A DISCOUNT PREMIUM OR PAR?
Assuming the market rate is 6.5 percent what is the value of a bond that pays an annual coupon paym Show more Assuming the market rate is 6.5 percent what is the value of a bond that pays an annual coupon payment a coupon rate of 8 percent a par value of $1000 and a maturity of 10 years. Is the bond in question 6 selling for a discount premium or par? B. Find the yield to maturity (YTM) for a bond with the following characteristics: Maturity = 15 years Coupon Rate = 10% Coupon Payments made Annually Par = $1000. Bond Selling Price = $1125 Bond Selling Price = $1000 Bond Selling Price = $975 c. Assume that a bond has a coupon rate of 10 percent makes annual coupon payments and has a par value of $1000. Calculate the bonds value under the following conditions. The bond matures in 5 years and the YTM is 5%: The bond matures in 5 years and the YTM is 10%: The bond matures in 5 years and the YTM is 15%: The bond matures in 15 years and the YTM is 5%: The bond matures in 15 years and the YTM is 10%: The bond matures in 15 years and the YTM is 15%: Looking at the prices that you calculated in problem 8 what effects do time and YTM have on a bonds price? Calculate the single and annual coupon payments assuming the following: Semiannual bond Coupon rate of 8 percent Par value of $1000: Annual bond Coupon rate of 4.5 percent Par value of $100: Monthly bond Coupon rate 12 percent Par value $850: Show less
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