Ytm formula if sold in 12 months
[DOC File]CHAPTER 7
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A 10-year bond has a 10 percent annual coupon and a yield to maturity of 12 percent. The bond can be called in 5 years at a call price of $1,050 and the bond’s face value is $1,000. Which of the following statements is most correct? a. The bond’s current yield is greater than 10 percent. b. The bond’s yield to call is less than 12 percent. c.
[DOC File]Final Exam Review - Iowa State University
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No, the $65k that was spent 6 months ago is a sunk cost and therefore does not need to be added in as part of the initial investment outlay. The company plans to use an existing, but not currently used building for the project. The building could be sold for $2.5 million after tax. Does this affect your answer in part a?
[DOC File]Answers to Text Discussion Questions
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A 9% discount rate provides the bond price $839.27. 9% is the yield to maturity. Approximate yield to maturity. 11. What is the approximate yield to maturity of a 14 percent coupon rate, $1,000 par value bond priced at $1,160 if it has 16 years to maturity? Use Formula 12–2. 12-11. The calculation is done on an annual basis. Yield to call. 12. a.
[DOC File]OBJECTIVE TYPE QUESTIONS - Entrance Exam
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YTM = ————————— X 100 (A + P) /2. Where C = coupon. A = Face Value/maturity Value. P = Price paid for the Bond. n = term to maturity. Applying this in the above example, 13 + (100 –109.45)/ 7 13 + (– 9.45/7) YTM = ————————————— = ————————— (100 + 109.45)/ 2 104.725
[DOC File]Solutions to Quiz 2 are after the questions
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18. A zero-coupon bond has a yield to maturity of 5% and a par value of $1,000. If the bond matures in 16 years, it should sell for a price of _____ today. A) $458.00 . B) $641.00 . C) $789.00 . D) $1,100.00 . 19. A convertible bond has a par value …
[DOC File]Annual Conference on PBFEAM
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By equation (23.1), we can calculate the duration of bond as following formula, Where = the payment at time t, = the YTM or required rate of return of the bondholders in the market; and n= the maturity in years. The coupon payment is, yield to maturity is 6%, and present bond value is sold at par $1000.
[DOC File]Chapter 10
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The bond is selling at par value. Its yield to maturity equals the coupon rate, 10%. If the first-year coupon is reinvested at an interest rate of r percent, then total proceeds at the end of the second year will be: [100 ( (1 + r) + 1100]. Therefore, realized compound yield to maturity will be a function of r as given in the following table:
[DOC File]Chapter Nine - NYU
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in interest rates, R, can be estimated using the above formula. 12. You have discovered that the price of a bond rose from $975 to $995 when the YTM fell from 9.75 percent to 9.25 percent. ... 21.5 months = X*12 months + (1-X)*23 months ( X = 13.6 percent . Thus 13.6 percent of the bond portfolio should be placed in the zeros after one year. 27 ...
[DOC File]CHAPTER 1
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The device will last 12 years and save you $2,400 per month in labor costs (assume that the savings are realized at the end of each month). You can earn 8.75% compounded monthly on your money. Which formula should you use to determine the value of the device? A. Formula 1B B. Formula 2B C. Formula 1A D. Formula 2A. Find the value of: $10 (1 ...
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