fin300 ch7 hw

Wesimann Co. issued 11-year bonds a year ago at a coupon rate of 7.7 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 6 percent, what is the current bond price?

$1,126.46 calc

You find a zero coupon bond with a par value of $10,000 and 27 years to maturity. The yield to maturity on this bond is 4.9 percent. Assume semiannual compounding periods

$2,706.16 calc

A bond that pays interest annually yields a rate of return of 5.50 percent. The inflation rate for the same period is 4 percent. What is the real rate of return on this bond?

1.44% 1.0550 / 1.04 -1 = .01442

McConnell Corporation has bonds on the market with 14.5 years to maturity, a YTM of 5.3 percent, a par value of $1,000, and a current price of $1,045. The bonds make semiannual payments.

5.75% calc answer

West Corp. issued 20-year bonds two years ago at a coupon rate of 7.4 percent. The bonds make semiannual payments. If these bonds currently sell for 104 percent of par value, what is the YTM?

7.01% calc

Whats the price a dealer will sell a bond?

Asked price

Locate the Treasury issue in Figure 7.4 maturing in February 2029. Assume a par value of $10,000. a. What is its coupon rate? b. What is its bid price in dollars? c. What was the previous day's asked price in dollars?

a. coupon rate 128.14

A note is generally defined as:

an unsecured bond with an initial maturity of 10 years or less.

Say you own an asset that had a total return last year of 12.1 percent. If the inflation rate last year was 7.7 percent, what was your real return?

r = (1 + .121)/(1 + .077) - 1 r = .0409, or 4.09%

The bond market requires a return of 9.8 percent on the 5-year bonds issued by JW Industries. The 9.8 percent is referred to as the

yield to maturity