Reference no: EM133070014
A 20-year bond with a principal value of $1,000,000 was issued 5 years ago, has a coupon rate of 10% with interest paid semi-annually and is priced at $100: Please answer the following:
1) Is the bond priced at a premium, discount or par dollar price?__________
2) What is the nominal rate of interest on the bond?__________
3) What is the real rate of interest assuming 3% inflation?__________
4) What is the tenor of the bond?__________
5) Is the bond a capital market security or money market security?__________
6) What is the coupon rate of the bond?__________
7) What is the yield to maturity of the bond?__________
8) What would the current yield of the bond be if it was priced at $105?__________
9) What is the semi-annual coupon payment received on the bond?__________
10) What is the legal contract that describes the form of the bond, the obligations of the issuer and the rights of bond h
olders?__________
11) When the bond matures in 20-years, ignoring the final coupon payment, what will the bondholder receive?__________
12) Is the bond a zero-coupon bond?(Yes or No)__________
13) If the bond had a call provision at par ($100) would this benefit the issuer or bondholder?
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