A ten-year 6% $1,000 bond having annual coupons and a redemption of $1,200 if the yield to maturity is 8% Calculate: 1. the Macaulay • duration, and 2. the Macaulay convexity.
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- 4) A 10 year bond with $50, 000 face value has semiannual coupon rate 4% and semiannual yield rate 2%. Fill out the following amortization table. Principle Outstanding t Payment Interest герaid Balance 1 2 3 12Consider a 10-year bond with a face value of $1,000 that has a coupon rate of 5.5%, with semiannual payments. a. What is the coupon payment for this bond? b. Draw the cash flows for the bond on a timelineA bond: pay $75 each year in interest, and a $1,000 payment at maturity. The $1,000 is called? A) couponB) face valueC) discountD) yield
- Assume that you purchased an 8 percent, 20-year, $1,000 par, semiannual payment bondpriced at $1,012.50 when it has 12 years remaining until maturity. Compute:a. Its promised yield to maturityA 7,000, 5% bond with annual coupons, redeemable at 108 at the end of 5 years is priced to yield 4%, m=1. Construct a table showing the amortization of premium. (Amortization of Premium)What is the Macaulay duration of a semiannual-pay 8.97 percent coupon bond with 10 years to maturity and a yield to maturity of 5.93 percent? Answer to two decimals, carry intermediate calcs. to four decimals.
- A bond certificate with a value of P 1,081,038.07 has a par value of P 1,000,000.00 and a redemption price of P 1,030,000.00 at the end of 10 years . If the bond rate is 9% . Calculate the yield that the investor obtained from his investment .Question 1. Duration and Banking Consider a 5-year bond with annual coupon payments. The bond has a face value (prin- cipal) of $100 and sells for $95. Its coupon rate is 3%. (The coupon rate is the ratio between the coupon value and the face value). The face value is paid at the maturity year in addition to the last coupon payment. 1. Calculate the bond's yield to maturity (YTM) and duration using its YTM. 2. Suppose the bond's YTM changes in the same way as a 5-year T-bill interest rate. Use the bond's modified duration to evaluate the relative change in the 5-year bond's value if the interest rate on 5-year T-bills falls by one basis point, that is, by 0.0001. This part was extracted from the balance sheet of the First Bank of Australia: Assets (Billion AUD) Bond 80 Liabilities (Billion AUD) Fixed-rate liabilities 60 where "Bond" here refers to the bond we specified above and the fixed-rate liabilities (banks future payment obligations) have an average duration of 4 years and YTM of…Compute the Macaulay duration under the following conditions: a. A bond with a four-year term to maturity, a 10% coupon (annual payments), and a market yield of 8%. Do not round intermediate calculations. Round your answer to two decimal places. Assume $1,000 par value. _________ years b. A bond with a four-year term to maturity, a 10% coupon (annual payments), and a market yield of 12%. Do not round intermediate calculations. Round your answer to two decimal places. Assume $1,000 par value. _________ years c. Compare your answers to Parts a and b, and discuss the implications of this for classical immunization. As a market yield increases, the Macaulay duration -(Select:declines/increases) . If the duration of the portfolio from Part a is equal to the desired investment horizon the portfolio from Part b is -(Select: no longer/still) perfectly immunized. Only typed answer
- Required to show your work:Bond ABC：Coupon rate(%): 4.5% (annual payment)Current market:??Tenior:15 YearsSuppose the yield to maturity of bond E is 3.7% and face value equals to $1,000,calculate the current market price of bond ABC.. A 7,000, 5% bond with annual coupons, redeemable at 108 at the end of 5 years is pricedto yield 4%, m=1. Construct a table showing the amortization of premium. (Amortization ofPremium)A bond has a face value of ₱100, 000, 4-year maturity period, and 3.2% coupon. What is the total interest paid to the bondholder? a. ₱12, 700 b. ₱12, 800 c. ₱12, 500 d. ₱12, 600