You purchase a $1000 par value bond for $960 that has a 5.75% coupon rate and...

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You purchase a $1000 par value bond for $960 that has a 5.75% coupon rate and 10 years until maturity. What is your annual return? 2. A City of Tempe muni bond has a yield of 4.3%. For an investor in the 28% tax bracket, what is the tax equivalent yield? 3. What would you be willing to pay for a $1000 par, 9.45% coupon bond with 20 years until maturity if you wanted to earn a return of 11% ? What is the bond only had 5 years until maturity? 4. What should a $1000 par, 7%, 15 year zero coupon bond be selling for? What if interest rates feel and investors would be happy earning 4% ? 5. A City of Glendale muni bond has a yield of 3.8%. For an investor in the 25% tax bracket, what is the tax equivalent yield? What is the tax equivalent yield for an investor in the 35% bracket? 6. What would you be willing to pay for a $1000 par, 6% coupon bond with 15 years until maturity if you wanted to earn a return of 7%? What if you only needed to earn a return of 5% ? What if you wanted to earn 6% ? 7. If you purchase a $1000 par value bond for $1045 that has a 7 5/8% coupon rate and 15 years until maturity, what will your annual return be? 8. Builtrite bonds have the following: 7 % % coupon, 14 years until maturity and are currently selling at $984. a. If you purchase the above bond, what would be your AYTM? b. If you want to make an 8% return, what would you be willing to pay? You purchase a $1000 par value bond for $960 that has a 5.75% coupon rate and 10 years until maturity. What is your annual return? 2. A City of Tempe muni bond has a yield of 4.3%. For an investor in the 28% tax bracket, what is the tax equivalent yield? 3. What would you be willing to pay for a $1000 par, 9.45% coupon bond with 20 years until maturity if you wanted to earn a return of 11% ? What is the bond only had 5 years until maturity? 4. What should a $1000 par, 7%, 15 year zero coupon bond be selling for? What if interest rates feel and investors would be happy earning 4% ? 5. A City of Glendale muni bond has a yield of 3.8%. For an investor in the 25% tax bracket, what is the tax equivalent yield? What is the tax equivalent yield for an investor in the 35% bracket? 6. What would you be willing to pay for a $1000 par, 6% coupon bond with 15 years until maturity if you wanted to earn a return of 7%? What if you only needed to earn a return of 5% ? What if you wanted to earn 6% ? 7. If you purchase a $1000 par value bond for $1045 that has a 7 5/8% coupon rate and 15 years until maturity, what will your annual return be? 8. Builtrite bonds have the following: 7 % % coupon, 14 years until maturity and are currently selling at $984. a. If you purchase the above bond, what would be your AYTM? b. If you want to make an 8% return, what would you be willing to pay?

Answer rating: 100% (QA)

1 Calculate the annual return on a bond Where Par value 1000 Purchase price 960 Coupon rate 575 Years to maturity 10 Coupon payment Par ... View the full answer