What is the relationship between ytm and bond price

Assignment Help Finance Basics
Reference no: EM132144567

A company has 6 percent coupon (compounded semiannually) bonds on the market with 15 years to maturity, and the par value of $1,000. At what price should the bonds be selling for if YTM is 7%? Had the bond been selling at $1,089.50, what would be the YTM (assuming the same coupon, maturity and par value)? Based on your answers above, what is the relationship between YTM and bond price?

Reference no: EM132144567

Questions Cloud

How do you figure out the pv of cash inflows : How do you figure out the PV of cash inflows for this problem?
What is the expected dividend next : Andy owns a stock whose price is $29.76. If the growth rate is 6% and the required return is 13%, what is the expected dividend next year?
What is the present value of the income stream above : The appropriate discount rate is 6 percent for Years 1-4 and 7 percent for Years 5-10. Payments are received at the end of each year.
What is property law : What is property law and what are the four broad categories it can be divided into?
What is the relationship between ytm and bond price : Based on your answers above, what is the relationship between YTM and bond price?
Impact on your current and future practice : Write an analytical paper, highlighting the key themes and learnings and their consequences/impact on your current and future practice
Explore in detail an aspect of nursing practice : Research / Evidence-based Practice Paper - This task will require you to explore in detail an aspect of nursing practice based on a provided case study
What are the steps to find stock price : What are the steps to find stock price in 15 years if ABC's next dividend is expected to be $6.16, its required return is 18%, its growth rate is 7%.
Intending to make tesla private : Why was it a problem for Elon Musk to tell the public that he was intending to make Tesla private?

Reviews

Write a Review

Finance Basics Questions & Answers

  Maximizes her chances of drawing the black ball

Suppose you arrange the balls in the way that maximizes her chances of drawing the black ball. What is her chance of winning?Probability =

  Its internal rate of return

Its internal rate of return

  What is the price-earnings ratio

The Kids' Mart has a market-to-book ratio of 3.3, net income of $87,100, a book value per share of $18.50, and 7,500 shares of stock outstanding. What is the price-earnings ratio?

  What rate would the fourth bank have to offer

What rate would the fourth bank have to offer you using continuous compounding that would make you indifferent between which accounts you put your money in?

  Calculate salt and pepper 2011 ebit

Salt and Pepper incurred $14.9 million in depreciation expense and paid $25.5 million in taxes on EBIT in 2012. Calculate Salt and Pepper's 2011 EBIT.

  Who would own a money market and why

Who would own a money market and why? What are some problems that might arise for a money market?

  What is wrong with just changing the name of the variable

Suppose a class has an instance variable whose name, due to refactorings, is no longer intention-revealing. In that case, the name should be changed.

  The fixd cost of this operation are 80000 while the

healthy foods inc sell 50 pounds bags of grapes to military for 10 a bag. the fixd cost of this operation are 80000

  What is the book value of liquid assets

Brad's Company has equipment with a book value of $500 that could be sold today at a 50% discount. Its inventory is valued at $450.

  What is the purpose of the strategic it plan

Segregation of duties consists of separating what four basic functions? Briefly define each function.

  Determine the change in net working capital of company

The 2014 balance sheet of Greystone, Inc., showed current assets of $3719 and current liabilities of $1780. The 2015 balance sheet showed current assets.

  How the british bonds could have generated a lower yield

Given that the lower yield was not because of default risk or exchange rate risk, explain how the British bonds could have generated a lower yield than the U.S. bonds.

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