one bond has a coupon rate of 5.6%, another a coupon rate of 8.3%. Both bonds pay interest annually, have 6-year maturities, and sell at a yield to maturity of 7%. If their yields to maturity next year are still 7%, what is the rate of return on each bond
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one bond has a coupon rate of 5.6%, another a coupon rate of 8.3%. Both bonds pay interest annually, have 6-year maturities, and sell at a yield to maturity of 7%. If their yields to maturity next year are still 7%, what is the
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- Bond P is a premium bond with a coupon rate of 8 percent. Bond D is a discount bond with a coupon rate of 3 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 5 percent, and have eight years to maturity.1. What is the current yield for bond P and D?2. If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P and bond D?One bond has a coupon rate of 6 %, another a coupon rate of 8.0%. Both bonds pay interest annually, have 6-year maturities, and sell at a yield of 7%. If their yields to maturity next year are still 7.0%, what is the rate of return on each bond?One bond has a coupon rate of 7.8%, another a coupon rate of 9.4%. Both bonds pay interest annually, ahve 7-year maturities, and sell at a yield to maturity of 7%. a. If their yields to maturity next year are still 7%, what is the rate of return on each bond?
- One bond has a coupon rate of 5.4%, another a coupon rate of 8.2%. Both bonds pay interest annually, have 13-year maturities, and sell at a yield to maturity of 7.5%. a. If their yields to maturity next year are still 7.5%, what is the rate of return on each bond? b. Does the higher-coupon give a higher rate of return over this period?A bond has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. a) If the bond has a yeild to maturity of 9% 1 year from now, what will its price be at that time? b) What will be the rate of return on the bond? c) Now assume that interest is paid semannually. What will be the rate of return on the bond? d) If the inflation rate during the year is 3% what is the real rate of return on the bond?A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. Assume a face value of $1,000 and annual coupon payments.a) If the bond has a yield to maturity of 9% 1 year from now, what will its price be at that time?b) What will be the rate of return on the bond? c) If the inflation rate during the year is 3%, what is the real rate of return on the bond? Assume annual interest payments.
- One bond has a coupon rate of 7.4%, another a coupon rate of 9.2%. Both bonds pay interest annually, have 11-year maturities, and sell at a yield to maturity of 8.0%. a. If their yields to maturity next year are still 8.0%, what is the rate of return on each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.) b. Does the higher-coupon bond give a higher rate of return over this period?One bond has a coupon rate of 7.6%, another a coupon rate of 9.3%. Both bonds pay interest annually, have 14-year maturities, and sell at a yield to maturity of 8.0%. a. If their yields to maturity next year are still 8.0%, what is the rate of return on each bond? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place. Rate of return Bond 1 % Bond 2 % b. Does the higher-coupon bond give a higher rate of return ove this period? Does the higher-coupon bond give a higher rate of return over this period?A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 9%, and sells for $1,100. Interest is paid annually. Assume a face value of $1,000 and annual coupon payments. 1) If the bond has a yield to maturity of 9% 1 year from now, what will its price be at that time? 2) What will be the rate of return on the bond? 3) If the inflation rate during the year is 3%, what is the real rate of return on the bond? Please show workings with formulas.
- A bond has 10 years until maturity, a coupon rate of 8.9%, and sells for $1,110. Interest is paid annually. (Assume a face value of $1,000.) What will be the rate of return on the bond?A bond has 10 years until maturity, a coupon rate of 8.3%, and sells for $1,170. Interest is paid annually. ( Assume a face value of $1,000.) If the bond has a yield to maturity of 9.7% 1 year from now, what will its price be at that time? Note: Do not round intermediate calculations. Round your answer to nearest whole number. What will be the rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign. If the inflation rate during the year is 3%, what is the real rate of return on the bond? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.A newly issued bond with 1 year to maturity has a price of $1,000, which equals its face value. The coupon rate is 15% and the probability of default in 1 year is 35%. The bond’s payoff in default will be 65% of its face value. a. Calculate the bond’s expected return. b. Use a data table to show the expected return as a function of the recovery percentage and the price of the bond. Please show how you got part B using all functions.