Illustrate what will be the value of each bond

Assignment Help Business Management

Reference no: EM13111203

Q. An investor has two bonds in his portfolio that have a face value of $1000 and pay a 10% annual coupon. Bond L matures in 15 years and Bond S matures in 1 year.

a. Illustrate what will be the value of each bond be if the going interest rate is 5%, 8% and 12%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 15 more payments are to be made on Bond L.

b. Explain why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change?

Reference no: EM13111203

Questions Cloud

Illustrate what are major sources of job stress at parkway : Illustrate what are the major sources of job stress at Parkway? Illustrate what does the research on employee stress suggest you should do to help minimize the experience of psychological strain for employees?

Estimate theoretical minimum number of workstations : An assembly line is to be designed to operate 7 1/2 hours per day and supply a steady demand of 300 units per day. Here are the tasks and their performance times:

Find thorough statistical analysis to back up statements : Which fund would be your best choice for investment? How do you state best in this case? Explain your answer in detail.

Define the main line of business of the company : Select a global company of your excellent in the service industry. Utilizing your selected global company as the subject matter research the ethics of marketing that impact this organization as well as prepare an APA paper that specifically

Illustrate what will be the value of each bond : Illustrate what will be the value of each bond be if the going interest rate is 5%, 8% and 12%? Assume that only one more interest payment is to be made on Bond S at its maturity and that 15 more payments are to be made on Bond L.

Identify a company with visible organizational culture : Identify a company with a visible organizational culture. Learn as much as you can about that company's culture, using library resources, online sources, contacts within the company, and as many creative means as you can.

Illustrate what are their nominal yield to maturity : Illustrate what are their nominal yield to maturity and their nominal yield to call? Illustrate what return should investors expect to ear on these bonds?

Explain what is the r square value for the regression : If the total amount of the squared variation of a variable Y is 280.70 as well as the sum of the squared unexplained error after regression is 68.80.

Explain how the u.s became involved in the politics of south : Explain how the U.S became involved in the politics of Southeast Asia? Explain how this involvement affected the U.S. political climate of the 1950s?

User Account

All Pages