Annual compounding and semiannual compounding

Assignment Help Financial Management

Reference no: EM131313989

Eight years ago you purchased a $1,000 30-year zero coupon bond for $575. What was the annual YTM on that bond at that time using (a) annual compounding; and (b) semiannual compounding?

A. 1.86%; 1.85% B. 7.39%; 2.46% C. 2.46%; 7.39% D. 3.36%; 5.46%

Reference no: EM131313989

Questions Cloud

Calculate the average rate of return for each year : Calculate the average rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Caswell's stock over this period? c. What is the geometric average rate of return earned by investi..

Market interest rate is expected to rise from this year : If the market interest rate is expected to rise from this year to the next, would you prefer to be holding a 5-year bond or a 10-year bond? If the market interest rate is expected to fall from this year to the next, would you prefer to be holding a 5..

Dollar return and percent return : A Treasury bond that you own at the beginning of the year is worth $1,070. During the year, it pays $42 in interest payments and ends the year valued at $1,080. What was your dollar return and percent return?

What is the one period rate of return on the bond : Suppose that you are holding a 5% coupon bond maturing in a year with a face value of $1000. The current market interest rate or yield to maturity is 8%. If the market interest rate rises from 8% to 10% over the course of the year, what is the one pe..

Annual compounding and semiannual compounding : Eight years ago you purchased a $1,000 30-year zero coupon bond for $575. What was the annual YTM on that bond at that time using (a) annual compounding; and (b) semiannual compounding?

Debt issue outstanding : Avicorp has a $13.2 million debt issue outstanding, with a 6.2% coupon rate. The debt has semiannual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 93% of par value.

Assume the company uses straight-line depreciation : A firm is considering an investment in a new machine with a price of $18 million to replace its existing machine. The current machine has a book value of $6 million and a market value of $4.5 million. Assume the company uses straight-line depreciatio..

Company has total debt to equity ratio : What does it mean if a company has a total debt to equity ratio of 62.96 while the industry and sector ratios are 122.21 and 67.70? How are they performing against the industry and sector? Why are they performing as such?

Methods of evaluating the risk of a project except : All of the following are methods of evaluating the risk of a project except which one?

User Account

All Pages