Calculate bond coupon payment
Problem Set On Chapter 8
A five year bond with a par value of 1000 will mature in 5 years for 1000. Annual coupons are payable at a rate of 6%. Calculate the Bond Amortization Schedule if the bond is bought to yield 8% annually. Calculate the Bond Amortization Schedule if the bond in Problem 28 is bought to yield 5%.
[DOC File]Chapter 1, Section 4
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9. A 10-year, 7% coupon bond with a face value of $1,000 is currently selling for $871.65. Compute your rate of return if you sell the bond next year for $880.10. Solution: 10. You have paid $980.30 for an 8% coupon bond with a face value of $1,000 that mature in five years. You plan on holding the bond …
[DOCX File]Homework Assignment – Week 2
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Bond Principal ($) Time to Maturity (yrs) Annual Coupon ($)* Bond Price ($) 100 0.5 0.0 98 100 1.0 0.0 95 100 1.5 6.2 101 100 2.0 8.0 104 *Half the stated coupon is paid every six months Calculate zero rates for maturities of 6 months, 12 months, 18 months, and 24 months.
[DOC File]Bond Yields and Prices
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Coupon rate: 8 percent, compounded semiannually. Semiannual payments. Calculate the price of this bond if the stated annual interest rate, compounded semiannually, is: 8%. 10%. 6%. Consider a bond with a face value of $1,000. The coupon payment is made semiannually and the yield on the bond is 12% (effective annual yield). How much would you ...
Coupon Rate
d. Current yield = coupon payment/bond price. As coupon payment remains the same and the bond price decreases, the current yield increases. 2. When the bond is selling at a discount, $970 in this case, the yield to maturity is greater than 8%. We know that if the discount rate were 8%, the bond …
[DOC File]Quantitative Problem Chapter 3
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Since we have a semiannual coupon bond, the coupon payment per six months is one-half of the annual coupon payment. There are two months until the next coupon payment, so four months have passed since the last coupon payment. The accrued interest for the bond is: Accrued interest = $68/2 × 4/6 = $22.67. And we calculate the dirty price as:
[DOC File]Solutions to Questions and Problems
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Calculate the duration of a $1,000, 6% coupon bond with three years to maturity. Assume that all market interest rates are 7%. Consider the bond in the previous question. Calculate the expected price change in interest rates drop to 6.75% using the duration approximation. Calculate the actual price change using discounted cash flows.
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