Question: Suppose you purchase a 20-year treasury bond with a 6% annual coupon ten years ago at face value . Today the bond's yield to maturity
Suppose you purchase a 20-year treasury bond with a 6% annual coupon ten years ago at face value. Today the bond's yield to maturity has risen to 8%.
If you sell this bond now (10 years to maturity), at what price can you sell your bond?
The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 6% and that the coupon payments are to be made semiannually. The yield to maturity of this bond is 8% .
How much will each semiannual coupon payment be?
| A. | 60 | |
| B. | 40 | |
| C. | 80 | |
| D. | 30
|
Consider the following probability distribution of returns for Alpha Corporation:
| Current Stock Price ($) | Stock Price in One Year ($) | Return R | ProbabilityProb(R) |
|
| $35 | 40% | 25% |
| $25 | $25 | 0% | 50% |
|
| $20 | -20% | 25% |
The standard deviation of the return on Alpha Corporation is closest to:
| A. | 21.8% | |
| B. | 21.5% | |
| C. | 22.4% | |
| D. | 19.0% |
The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 6% and that the coupon payments are to be made semiannually. The yield to maturity of this bond is 8%
This bond will trade at
| A. | Premium | |
| B. | Discount | |
| C. | Par | |
| D. | Face Value |
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