Calculate the value of the bond

Assignment Help Finance Basics
Reference no: EM132396540

You own a bond that pays $110 in annual? interest, with a ?$1,000 par value. It matures in 10 years. Your required rate of return is 12 percent.

a. Calculate the value of the bond.

b. How does the value change if your required rate of return? (1) increases to 14 percent or? (2) decreases to77 ?percent?

c. Explain the implications of your answers in part ?(b?) as they relate to interest rate? risk, premium? bonds, and discount bonds.

d. Assume that the bond matures in 33 years instead of 10 years. Recompute your answers in part (b?).

e. Explain the implications of your answers in part (d?) as they relate to interest rate? risk, premium? bonds, and discount bonds.

Reference no: EM132396540

Questions Cloud

Discuss organization or brand giving your classmates : Discuss the organization or brand giving your classmates a view details about why you feel it is a monopoly
Discuss importance of trends in population health management : Discuss the importance of trends in epidemiology and population health management. Be 2 pages in length, not including the required cover and reference page.
Cournot equilibrium and duopoly problems in microeconomics : How to do Cournot Equilibrium and duopoly problems in Microeconomics - Inverse Demand Function and What is Optimal Price P1* And Optimal Profit ?1* for duopolis
ECMT2130 Financial Econometrics- Assignment Problem : ECMT2130 Financial Econometrics Assignment Help and Solutions- University of Sydney Australia- calculate continuously compounded returns for the ten stocks.
Calculate the value of the bond : You own a bond that pays $110 in annual? interest, with a ?$1,000 par value. It matures in 10 years. Your required rate of return is 12 percent.
Dominant microprocessor company intel adapts to next trend : After reading the section titled "Dominant Microprocessor Company Intel Adapts to Next Trend" "2018-2019 Intel Corporate Responsibility Report.
What difficulties might you face in applying the theory : Discuss a motivation theory you would use from Chapter 10 in Management of Healthcare Organizations to implement change and work toward resolving this issue.
State laws regarding notifying customers of data breaches : Discuss the reasons why we have a hodge-podge of different state laws regarding notifying customers of data breaches.
Describe your experience using impression of coding : Describe your experience using the manual and your impression of coding. Why is coding necessary in health insurance? Be 2 pages in length, not including the.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd