What happens to the value of your bond

Assignment Help Financial Management

Reference no: EM131856690

1. Suppose you buy a 7 percent coupon, 20-year bond today when it's first issued. If interest rates suddenly rise to 15 percent, what happens to the value of your bond? Why?

2. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 25 years to maturity, and a coupon rate of 6.4 percent paid annually. If the yield to maturity is 7.5 percent, what is the current price of the bond?

3. Page Enterprises has bonds on the market making annual payments, with nine years to maturity, and selling for $948. At this price, the bonds yield 5.9 percent. What must the coupon rate be on the bonds?

4. Say you own an asset that had a total return last year of 10.7 percent. If the inflation rate last year was 3.7 percent, what was your real return?

Reference no: EM131856690

Questions Cloud

According to the equation of state : According to the equation of state p=RT, A. an increase in pressure requires an increase in both density and temp.

Critical analysis - project management body of knowledge : Need to get critical analysis of the Document, Project Management Body of Knowledge 1996 by the Standard committee of the PMI 8 pages

What type do you think has the most impact on our area : Many different types of air masses Affect North America. What type do you think has the most impact on our area?

Explain the summary of ethical and legal issues : A summary of ethical and legal issues/considerations that you might encounter when responding to a crisis in your community.

What happens to the value of your bond : what happens to the value of your bond? Why?

What is the temperature at the altitude of 100m : If the environmental lapse rate in the figure is 1.5 C/100m, what is the temperature at the altitude of 100m?

What role played by reason in humes account of moral action : Explainthe nature and role of ‘moral sentiment' in Hume's outline of morality. What role, if any, is played by reason in Hume's account of moral action?

Describe how atmospheric stability is determined : Describe how atmospheric stability is determined and discuss the times of day when major changes in the environmental lapse rate are most likely.

About the payment under the different time assumptions : What do you notice about the payment under the different time assumptions?

User Account

All Pages