Ytm of the bond in euros and in dollars

Assignment Help Finance Basics
Reference no: EM131669403

A U.S. investor bought a 6 year German federal bond (Bund), the face value of the bonds is 1,000 EUR, the coupon is 1.5%, and the price 1,125 EUR. At the time of buying the bond, the exchange rate was 1.3824 [USD/EUR], now, three years later, find the exchange rate for the Euro and use it to calculate the YTM of the bond in Euros and in Dollars. Suppose the exchange rate will continue at the rate you found and remember you have three years residual life.

Use EUR spot rate

Reference no: EM131669403

Questions Cloud

Leverage in the capital structure : The firm's tax rate is 34 %. What is the value of the firm's tax shield (i.e. the change in firm value due to the use of leverage in the capital structure)?
What is the strength of the electric field at the position : What is the strength of the electric field at the position indicated by the dot - What is the direction of the electric field at the position indicated
Profitability index of the investment : If the appropriate Cost of Capital (quoted interest rate) is 6.1 %, what is the Profitability Index of the investment? Enter your answer to the nearest .01.
Screaming that a huge investment in roads : The central bank of a country, whose economy depend on exports, was proposing what they called Quantitative Easing
Ytm of the bond in euros and in dollars : At the time of buying the bond, the exchange rate was 1.3824 [USD/EUR], now, three years later, find the exchange rate for the Euro.
What are the importance of having a distinctive strategy : What are the importance of having a Distinctive Strategy and Competitive Approach? Why are vision and mission statements important
Firm debt-equity ratio : Zombie Corp. has a profit margin of 6.1 percent, total asset turnover of 2.0, and ROE of 18.24 percent. What is this firm's debt-equity ratio?
Develop a product service idea : Develop a product service idea.Describe the product/service including the benefits of using the product/service.
What is the company days sales in receivables : Assuming 80 percent of sales are on credit, what is the company's days' sales in receivables?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the test value

A car salesman claims that the variance of prices on convertibles is higher than the variance on station wagons. The standard deviation of 16 convertibles is $6800 and the standard deviation of 24 station wagons is $3900. For α = 0.05 , what..

  Organisation drawing on relevant hrm concepts

In your answer indicate whether these two aspects can exist at the same time within an organisation drawing on relevant HRM concepts

  What is the value per share of boehms stock

The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 15%. What is the value per share of Boehm's stock?

  Optimal debt-to-asset ratio

Suppose that a company with total assets of $1,000 pays a corporate tax rate of 30%, and that its bankruptcy cost function is given by k(D) = 0.0005D2. What is the optimal debt-to-asset ratio, D/A, for this company?

  Calculate the annual internal rates of return

Problem 1:  Calculate the annual internal rates of return (IRR) for the following investments (time t is in years):

  Calcin jacobs is a widower who recently retired after a

calvin jacobs seeks the good lifecalcin jacobs is a widower who recently retired after a long career with a major

  If the expected return on the market is 16 percent and the

silicon corp. recently issued 10-year 12 percent coupon bonds at par value. silicons beta is 0.6 the optimal capital

  The oakland mills company has disclosed the following

the oakland mills company has disclosed the following financial information in its annual reports for the period ending

  How much is the principal loan balance reduced

How much is the principal loan balance reduced by during the first year? What is the current value of your settlement? What should be the lease payments?

  Camila plans to go on vacation to australia

Camila plans to go on vacation to Australia in 11 years from now She estimates that she will need 29358 for the trip How much does she need to place in a saving account today that earns 6.89 per year compounded quarterly to accumulate this amount?

  Calculate the one year bond equivalent yield

calculate the one year bond equivalent yield for the Swiss government security that would support the interest rate parity condition.

  Calculating sustainable growth rate

You've collected the following information about Odyssey, Inc.:

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