Exam 12: Macroeconomic and Industry Analysis

You have just purchased a 10-year zero-coupon bond with a yield to maturity of 10% and a par value of $1,000.What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 11% at the time you sell.

A 1% decline in yield will have the greatest effect on the price of the bond with a

A coupon bond is reported as having an ask price of 108% of the $1,000 par value in the Wall Street Journal.If the last interest payment was made one month ago and the coupon rate is 9%,the invoice price of the bond will be ____________.

The yield to maturity of a 20-year zero coupon bond that is selling for $372.50 with a value at maturity of $1,000 is ________.

You have just purchased a 7-year zero-coupon bond with a yield to maturity of 11% and a par value of $1,000.What would your rate of return at the end of the year be if you sell the bond? Assume the yield to maturity on the bond is 9% at the time you sell.

A coupon bond that pays interest semi-annually has a par value of $1,000,matures in 7 years,and has a yield to maturity of 9.3%.The intrinsic value of the bond today will be ________ if the coupon rate is 9.5%.

You purchased a zero-coupon bond that has a face value of $1,000,five years to maturity and a yield to maturity of 7.3%.It is one year later and similar bonds are offering a yield to maturity of 8.1%.You will sell the bond now.You have a tax rate of 40% on regular income and 15% on capital gains.Calculate the following for this bond:

A coupon bond that pays interest annually,has a par value of $1,000,matures in 5 years,and has a yield to maturity of 10%.The intrinsic value of the bond today will be __________ if the coupon rate is 12%.

A coupon bond that pays interest annually is selling at par value of $1,000,matures in 5 years,and has a coupon rate of 9%.The yield to maturity on this bond is:

You purchased an annual interest coupon bond one year ago that now has 18 years remaining until maturity.The coupon rate of interest was 11% and par value was $1,000.At the time you purchased the bond,the yield to maturity was 10%.The amount you paid for this bond one year ago was