Computation of bonds current yield and yield to maturity

Assignment Help Finance Basics
Reference no: EM1314616

Computation of bonds Current yield and yield to maturity

1. An 8% semi-annual coupon bond matures in 5 years. The bond has a face value of $1000 and a current yields of 8021%. What are the bond\'s price and YTM?

2. Bond X is noncallable, has 20 years to maturity, a 9% annual coupon, and a $1000 par value. Your required return on Bond X is 10%, and if you buy it you plan to hold it for 5years. You, and the market, have expectations that in 5years the yield to maturity on a 15-year bond with similar risk will be 8.5%.

How much should you be willing to pay for Bond X today?

(Hint: You will need to know how much the bond will be worth at the end of 5 years)

Reference no: EM1314616

Questions Cloud

Computation of bonds yield to maturity and yield to call : Computation of bonds yield to maturity and yield to call on bonds and Which yield might investors expect to earn on these bonds
Calculation of wages paid to employees : Calculation of wages paid to employees - Compute the following Indicate the best answer to each question in the space provided.
Identify the factor of trinomial : Identify the factor of trinomial.
Calculation of payment made to vendors : Calculation of payment made to vendors and Compute the following (and show your work to earn partial credit in the event your responses are incorrect):
Computation of bonds current yield and yield to maturity : Computation of bonds Current yield and yield to maturity and How much should you be willing to pay for Bond X today
Factoring the quadratic equation : Factoring the quadratic equation.
Calculation of cash received from customers : Calculation of cash received from customers and Indicate the best answer to each question in the space provided.
Underlying circumstances to study economics : Illustrate and explain the interaction of households, businesses, government and global markets in the circular flow of economic activity.
Simplifying the expression : Simplifying the expression.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd