What is the value of the bonds to you given the yield

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Reference no: EM133369167

Assignment:

1. Abner?Corporation's bonds mature in 23 years and pay 9 percent interest annually. If you purchase the bonds for $?1,150, what is your yield to?maturity? Round to two decimal? places.)
2. The 10?-year ?$1,000 par bonds of Vail Inc. pay 13 percent interest. The? market's required yield to maturity on a? comparable-risk bond is 9 percent. The current market price for the bond is $1,140.
2A. Determine the yield to maturity.

2B. What is the value of the bonds to you given the yield to maturity on a? comparable-risk bond?

2C. Should you purchase the bond at the current market? price?

3.The Saleemi? Corporation's ?$1,000 bonds pay 12 percent interest annually and have 13 years until maturity. You can purchase the bond for ?$1,135.

3A. What is the yield to maturity on this? bond?

3B. Should you purchase the bond if the yield to maturity on a? comparable-risk bond is 9 ?percent?

4. The 14?-year, ?$1,000 par value bonds of Waco Industries pay 11 percent interest annually. The market price of the bond is ?$?1,155 and the? market's required yield to maturity on a? comparable-risk bond is 8 percent.

4A. Compute the?bond's yield to maturity.

4B. Determine the value of the bond to you given the? market's required yield to maturity on a? comparable-risk bond.

4C. should you purchase the ?bond?

5. What would you expect the nominal rate of interest to be if the real rate is 3.7 percent and the expected inflation rate is 7.4 ?percent?

Reference no: EM133369167

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