User Account

All Pages

Determine the yield to maturity for this bond

Assignment Help Financial Accounting
Reference no: EM133119082

Question - The coupon rate and market price for the 10-year US Treasury bond are 2.50% and 96.3828 respectively. Note, the price is expressed as a percentage of par (like other bonds). If par is $1000, then this bond is selling for $963.828.

Q1. Assume that this bond will mature in precisely 10 years, pay coupons semi-annually, and has a par value of $1000. Determine the yield to maturity for this bond.

Q2. Compute the duration of this bond and use it to estimate the new value of the bond if rates were to suddenly decline by 0.80%.

Q3. Calculate the bond's value directly (using the present value approach) assuming that rates declined 0.80% from the yield to maturity you estimated in the first question.

Q4. Compare your answers to Questions 2 and 3. Explain the source of any difference. Which is more correct.

Reference no: EM133119082

Questions Cloud

Determine the forward or futures contract : Suppose you are a farmer who primarily grows soybeans. You would like to lock in the price you can sell your produce for in six months (when it is ready for har
How much revenue can Ned Stark recognize : After moving to warmer weather, Ned Stark sold his fur coats for $2,000. How much revenue can Ned Stark recognize
Calculate the total payment for the fha purchase : Calculate the total payment for the FHA purchase scenario below.
Calculate the interest rate : As an investor, you expect the inflation rate to be 7% next year, to fall to 5% during the following year and then to remain at a rate of 3% thereafter.
Determine the yield to maturity for this bond : Assume that this bond will mature in precisely 10 years, pay coupons semi-annually, and has a par value of $1000. Determine the yield to maturity
Equity-based crowdfunding for a startup firm : What are the alternatives to equity-based crowdfunding for a startup firm?
What the total income tax expense for the year : Pupil Inc. had $300 million in taxable income for the current year. What the total income tax expense for the year
Plan for contingencies : How would you plan for contingencies that may affect the completion of sale? e.g. the seller has removed a large tree from the front yard which was not stipulat
Value of the short forward contract : A short forward contract that was negotiated some time ago will expire in three months and has a delivery price of $50. The current forward price for three-mont

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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