Find out the yield to maturity of the bonds

Assignment Help Finance Basics
Reference no: EM13754227

Problem 1: Springfield Nuclear Energy Inc. bonds are currently trading at $1,449.44. the bonds have a face value of $1,000, a coupon rate of 10.5% with coupons paid annually, and they mature in 10 years. What is the yield to maturity of the bonds?

Problem 2: Consider an annual bond with a face value of $100, 10 years to maturity, and a price of $81. The coupon rate on the bond is 6%. If you can invest coupons at a rate of 4.55 per annum, then how much money do you have if you hold the bond to maturity?

Problem 3: What is the price of a 3 year, 7.5% coupon rate, $1,000 face value bond that pays interest quarterly if the yield to maturity on similar bonds is 11.6%?

Problem 4: What is the yield to maturity of a 9.2% semiannual coupon bond with a face value of $1,000 selling for $885.82 that matures in 9 years?

Problem 5: Wee Beastie Animal Farm bonds have 7 year to maturity and pay an annual coupon at the rate of 5.7%. The face value of the bonds is $1,000. The price of the bonds is $1,011.94 to yield 5.94%. What is the capital gain yield on the bonds?

A. -0.14%

B. -0.13%

C. +0.14%

D. +0.17%

E. -0.12%

Problem 6: A 11 year bond pays interest of $26.40 semiannually, has a face value of $1,000, and is selling for $743.72. What are its annual coupon rate and yield to maturity?

Problem 7: Acme Inc. just issued a bond with a $10,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays semi-annual coupons, and the yield to maturity is 9%, what will the bond sell for?

Problem 8: You have just purchased a 15- year, 1,000 par value US Government bond for $909.20. The yield to maturity on the bond is 8.6%. What is the coupon rate?

A. 8.6%

B. 15.0%

C. 7.5%

D. 7.0%

E. 9.0%

Problem 9: The Federal Government 2 year coupon bond has a face value of $1,000 and pays annual coupons of $33. The next coupon is due in one year. Currently, the one and two - year spot rates on Federal Government zero coupon bonds are 4% and 4.5%. What is the correct price for the coupon bond at time zero (immediately)?

A. $976.17

B. $977.68

C. $1.023.49

D. $1,025.00

E. $1,000.00

Problem 10: A bond with an annual coupon of $100 originally sold at par for $1,000. The current yield to maturity on this bond is 9%. Assuming no change in risk, this bond would sell at a ______ in order to compensate_________________.

A. discount; the issuer for the higher cost of borrowing

B. premium; the seller for the above market coupon rate

C. discount; the seller for the above market coupon rate

D. discount; the purchaser for the above market coupon rate

E. premium; the purchaser for the above market coupon rate    

Verified Expert

The paper is in relation to the calculation of yield to maturity of bonds under different conditions. Here there are 10 practical problems required to be solved taking into consideration time value of money.

Reference no: EM13754227

Questions Cloud

Write a program that prompts the user : Write a program that prompts the user for the following information inputs. Your program should display these inputs back. Remember, any variable must be declared prior to being used in the program
What were the duties of the frontier soldiers : What were the duties of the frontier soldiers?
Ttime for implementation, and return on investment : You are the database administrator for your company. As your company continues to grow and expand, you have been asked to look into a client-server architecture for your database, which will allow you to have a database in a distributed environment. ..
Write a newspaper article about the gunpowder plot : Write a newspaper article about The Gunpowder Plot?
Find out the yield to maturity of the bonds : Problem 1: Springfield Nuclear Energy Inc. bonds are currently trading at $1,449.44. the bonds have a face value of $1,000, a coupon rate of 10.5% with coupons paid annually, and they mature in 10 years. What is the yield to maturity of the bonds?
Information about the healthy dining program : Helping Restaurants Fight Obesity: As consumers become increasingly concerned about obesity and health risks associated with nutrition, many seek more information about restaurant foods. Explain in your presentation that information about the Healt..
Determine whether replication would be the right approach. : You are a database administrator for your company. With the acquisition of SNHU Appliances, your database is running very slowly. Your management has asked you to look into options to optimize the database. You think replication might be a good solut..
Biometric devices as computer peripherals : What are your thoughts regarding current or next generation biometric devices as computer peripherals? What near-term and long-term trends do you think we will see in the human-computer interface in general?
Hy russian nobility class think that catherine was great : provided links to primary sources that you will examine to help you answer the focus question: Why did the Russian nobility and middle class think that Catherine was "Great"?

Reviews

Write a Review

Finance Basics Questions & Answers

  Your finance professor insists that when it comes to

your finance professor insists that when it comes to managing working capital a the more cash a corporation has on its

  Find the net proceeds from the sale of each bond

Flotation costs of $30 per bond will be incurred in the process (which implies that f = 2.97%, or 0.0297 in decimal form) and the firm is in a 40% tax bracket.

  Treasury and the corporate bonds

Based on the information about the corporate bond that was given in part a, calculate yields and then construct a new yield curve graph that shows both the Treasury and the corporate bonds.

  Compute the length of firmcash conversion cycleif zoccos

the zocco corporation has an inventory conversion period of 60daysan average collection period of 38 days and a

  Discuss the tendency of ratios to fluctuate over time

discuss the tendency of ratios to fluctuate over time explain how accounting practices seasonality economy competitors

  In the analysis done so far we have not considered the

balance sheet 2010type of financingbonds 8 1000 par 30-year

  Correlation of the project cash flows

Corporation planning two potential projects, X and Y. In assessing the projects' risks, the corporation estimated the beta of each project versus both the company's other assets and the stock market,

  Calculate the required rate of return for mars inc.s stock

Calculate the required rate of return for Mars Inc.'s stock. The Mars's beta is 1.2, the rate on a T-bill is 4 percent, the rate on a long-term T-bond is 6 percent, the expected return on the market is 11.5 percent.

  How can management eliminate or reduce

Most employees choose to eat their lunch in the cafeteria. Is there an agency cost here? If so, how can management eliminate or reduce this agency cost?

  The target capital structure for jowers manufacturing is 49

the target capital structure for jowers manufacturing is 49 common stock 10 preferred stock and 41 debt. if the cost of

  Compare the gaap and economic balance sheets use the same

compare the gaap and economic balance sheets.use the same company you studied in unit 1 to accomplish these tasksusing

  Operating vs non operating and recurring vs nonrecurring

operating vs. non operating and recurring vs. nonrecurring are two distinct dimensions of classifying income. explain

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