The bond certificate with a par value P1,000,000 and a bond rate of 10 % was sold for P1,064, 176.58 . Calculate the yield that the investor obtained from his investmen
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The bond certificate with a par value P1,000,000 and a bond rate of 10 % was sold for P1,064, 176.58 . Calculate the yield that the investor obtained from his investment .
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- You have two bonds in your asset portfolio. The first bond has a yield to maturity of 5% and a price of £,1000 and the second bond has a yield to maturity of 8% and a price of £2,000. What is the yield to maturity of your assets? a. 0.06 b. 0.07 c. 0.09A 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?Describe and differentiate between a bonds (a) current yield and (b) yield to maturity. Why are these yield measures important to the bond investor? Find the yield to maturity of a 20-year, 9 percent, 1,000 par value bond trading at a price of 850. Whats the current yield on this bond?
- The return an investor earns on a bond over a period of time is known as the holding period return, defined as interest income plus or minus the change in the bond's price, all divided by the beginning bond price. a. What is the holding period return on a bond with a par value of $1,000 and a coupon rate of 7.5 percent if its price at the beginning of the year was $1,070 and its price at the end was $960? Assume interest is paid annually. Note: Negative value should be indicated by parenthesis. Round your answer to 2 decimal places. Holding period return %If your primary goal is current yield, which one of these bonds is the wiser investment? Bond A: $1,000 corporate bond that pays 6 percent and has a current market value of $700; or Bond B: $1,000 corporate bond that pays 7.25 percent and has a current market value of $800?An investor gathers the following data on three newly-issued bonds: 1-year government bond, 3.0% yield 1-year ABC corporate bond, 4.2% yield 10-year government bond, 3.8% yield If investors require a 0.5% liquidity premium for corporate bonds, what are the components of the required return on a 10-year ABC bond?
- Compute the bond’s current yield based on the last traded price of $1,016.20.A bond has a $11,000 face value, a 7-year maturity, and a 2.75% coupon. Find the total of the interest payments paid to the bondholder.How will it be possible to sell bonds paying investors 6.25% when other, similar investments will provide the investors a return of 6.5%?
- You purchase a bond with a $100, 000 face value. a. The bond has a semi annual coupon of $3,880 and a maturity of 8 years. Calculate the annual coupon rate b. Assume the yield to maturity is 5.800%. Calculate the present value of the face amount (as if it was a STRIPS). c. Calculate the price of the bond. d. calculate the present value of the coupon payments. e. Calculate the current yieldUse the following table to find the bond value: a. Price the bonds from the above table with annual coupon payments. b. Price the bonds from the above table with semiannual coupon payments.How do investors calculate the net present value of a bond? If a bond's coupon payment is C, the interest rate is R, and the bond's coupon payment is made in each period for T years at which time the original principal, P, is repaid, then the bond's present discounted value (PDV) is C A. PDV = + (1 + R) (1 + R? (1 + R)T B. PDV = C(1 + R) + C(1 + R)2 - + C(1 + R)T + P(1 + R)T + C P OC. PDV = - + R R2 RT RT C D. PDV = P + C C (1 + R) (1+R)2 (1 + R)T C E. PDV = + + + + (1 + R) (1+ R)2 (1 + R)T (1 + R)T If the interest rate is 9 percent, what is the present value of a perpetuity that pays $50,000 each year, forever? The perpetuity's value is $ (Enter a numeric response rounded to two decimal places.)