Reference no: EM13870765
1. You are awarded a 10% pay raise. Inflation for the upcoming year is 2.5%. What is your real pay raise? Answer in percent and round to two decimal places.
2. According to the yield curve, the one-year rate is 3% and the two-year rate is 5%. A two-year coupon bond pays $40 in one year and $1040 in two years. Calculate the present value of this bond. Round to the penny.
3. Investment A will return to you $2000 in one year if you invest $1750 today. Investment B will return to you $3000 in one year. What is the most you will pay for Investment B?
4. A bond with a par value of $1000 makes semi annual coupon payments of $50. What is its coupon rate?
5. A semi annual coupon bond with face value of $1000 has a coupon rate of 8% and matures in 12 years. The market-determined discount rate on this bond is 9%. What is the price of the bond? Round to the penny.
6. A semi annual coupon bond with coupon rate of 5% and face value of $1000 trades at $1050. It matures in 7 years. What is its yield to maturity (YTM)? Answer in percent and round to two decimal places.
7. A 5 year semi annual coupon bond with a face value of $1000 trades at $925. The market-determined discount rate is 6%. What is the coupon rate? Answer in percent and round to two decimal places.
8. A zero coupon bond with a face value of $1000 that matures in 20 years sells today for $600. What is the yield to maturity? (Use annual compounding.) Enter in percent to two decimal places.
9. What is the coupon rate of a bond with a face (maturity) value of $1000, a Price (PV) of $874.39, 8 years (16 periods) to maturity, and yield to maturity of 6%? (Note that the YTM of 6% is an annual rate, but coupon payments are made semi annually.
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What is the bond price if the yield to maturity rises to
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: You are awarded a 10% pay raise. Inflation for the upcoming year is 2.5%. What is your real pay raise? A zero coupon bond with a face value of $1000 that matures in 20 years sells today for $600. What is the yield to maturity? According to the yield ..
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