What will the value of the bond l be

Assignment Help Finance Basics

Reference no: EM131795876

Problem: Bond valuation

An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 6% annual coupon. Bond L matures in 12 years, while Bond S matures in 1 year.

Assume that only one more interest payment is to be made on Bond S at its maturity and that 12 more payments are to be made on Bond L.

1. What will the value of the Bond L be if the going interest rate is 4%? Round your answer to the nearest cent.

2. What will the value of the Bond S be if the going interest rate is 4%? Round your answer to the nearest cent.

3. What will the value of the Bond L be if the going interest rate is 9%? Round your answer to the nearest cent.

4. What will the value of the Bond S be if the going interest rate is 9%? Round your answer to the nearest cent.

5. What will the value of the Bond L be if the going interest rate is 11%? Round your answer to the nearest cent.

6. What will the value of the Bond S be if the going interest rate is 11%? Round your answer to the nearest cent.

Reference no: EM131795876

Questions Cloud

Prepare a complete statement of cash flows : The loss on the cash sale of equipment was $5,125. Prepare a complete statement of cash flows; report its operating activities using the indirect method

Do you experience public speaking anxiety : How serious is this anxiety (ranging anywhere from "Minor: I can deal with it" to "Major: I freeze and cannot deliver" or something in between)?

What is the duration of the bond : Assume a bond with a $1,000 par value and an 8 percent coupon rate, two years remaining to maturity, and a 7 percent yield to maturity.

What is the width of second square well : The ground state energy of an electron in an infinite square well of width 30.8 nm is the same as the energy of the n = 3 state of another infinite square well

What will the value of the bond l be : An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 6% annual coupon. Bond L matures in 12 years, while Bond S matures.

Indicate the weaknesses in internal accounting control : Indicate the weaknesses in internal accounting control in the clubs fund-raising plan - improvements in internal control procedures for the club's fund-raising

Hypothetical electrons orbiting around a nucleus : Consider two hypothetical electrons orbiting around a nucleus. Each electron has the same mechanical energy. If the electron's orbit are treated.

Calculate the probability of finding the proton : Assuming that the system is in the n = 2 state, calculate the probability of finding the proton at x = 12.0 ±0.3 nm. The "walls" of the well are at x = 0 and x.

State of a harmonic oscillator potential : What is the classical angular frequency of oscillation of this particle? (1 eV = 1.60 × 10-19 J, h = 1.055 × 10-34 J · s, h = 6.626 × 10-34 J · s)

User Account

All Pages