What is the present value of the bond

Assignment Help Finance Basics
Reference no: EM132000709

17-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000% of face value every six months). The reported yield to maturity is 4.8% (a six-month discount rate of 5.6/2 = 2.8%). (Do not round intermediate calculations. Round your answers to 2 decimal places.)

A) What is the present value of the bond?

B) If the yield to maturity changes to 1%, what will be the present value?

C) If the yield to maturity changes to 8%, what will be the present value?

D) If the yield to maturity changes to 15%, what will be the present value?

Reference no: EM132000709

Questions Cloud

How much would be your total yield if the bond was sold : Bond with face value $1000, maturity 15 years coupon rate 5.5% per year payable semi-annually aand YTM 7% currently bond sells for $900.
What are expected profits based on expectations : Your business plan for your proposed start-up firm envisions first-year revenues of $90,000, fixed costs of $36,000, and variable costs equal to one-third
What is the balance at the end : What is the balance at the end of 10 years and how does it differ if the $1,200 is deposited at the end or the beginning of each year?
Predict systolic blood pressure : (a) Find a linear model for these data using age (x) to predict systolic blood pressure (y)
What is the present value of the bond : 17-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000% of face value every six months).
Plan and establish compliance management systems : BSBCOM603 Plan and establish compliance management systems -external consultant hired to conduct research into and propose an appropriate compliance management
Thinking about retirement : You are now thinking about retirement. You plan on working for 30 more years and then retire. Upon your retirement 30 years from today
What is the shortfall in reserves : The required reserve ratio is 10%. There is a deposit outflow of $8 million. What is the shortfall in reserves?
Estimate of the intrinsic value of a share of the stock : a. What is your estimate of the intrinsic value of a share of the stock?

Reviews

Write a Review

Finance Basics Questions & Answers

  Briefly indicate why this disclosure can be significant

For oil and gas companies, there is the potential for a significant difference between the reported income and cash flows from operations. Comment.

  Predict the impact of universal coverage

In the 1970s, researchers at the RAND Corporation conducted a social experiment to investigate the relationship between health insurance coverage and health.

  Calculate net present value for a company

The tax rate is 30%, and 70% of franking credits are claimed by shareholders. Propfix requires a return of 15% pa after tax on its investments. Should they make the upgrade

  Jensens travel agency has 9 percent preferred stock

jensens travel agency has 9 percent preferred stock outstanding that is currently selling for 30 a share. the market

  What is the current yield on the bonds

Martin Software has a 9.2 percent coupon bonds on the market with 18 years to maturity.  The bonds make semiannual payments and currently sell for 106.8 percent of par.  What is the current yield on the bonds? the YTM? the effective annual yield?

  Determine which plants to operate in each period

Determine which plants to operate in each period to minimize cost while meeting demand. - Each power plant i generates at most qi megawatts while operating.

  Assessment of the competitive strength

Using your text book, the AUO library and the Internet, research PepsiCo. What is your assessment of the competitive strength of PepsiCo's different business units?

  Indicate how the prediction could be tested

Create predictions about the relationships between behavioral variables that interest you.- What would be the advantages and disadvantages of studying the relationship using each of the different designs?

  What size interest rate change make institution insolvent

A bank has DA = 2.5 years, DL = 0.6 years and k = 89%. Assets are equal to $1,500 million. According to the duration gap model.

  What are the new eoq and annual number of objects

As a result of lower interest rates, the financial manager determines the carrying costs are now $1.80 per unit. What are the new EOQ and annual number of objects?

  How the imputation tax system works in australia

Briefly explain how the imputation tax system works in Australia by providing an example. Assume a 30% corporate tax rate and a 15% marginal tax rate for the investor.

  What type of descriptive chart would be most useful

A researcher is interested in determining whether there is a relationship between the number of room air conditioning units sold each week and the time of year.

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