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Levels Tought:
University
| Teaching Since: | Apr 2017 |
| Last Sign in: | 438 Weeks Ago, 2 Days Ago |
| Questions Answered: | 9562 |
| Tutorials Posted: | 9559 |
bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
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1.Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of A????11,000, 15 years to maturity, and a coupon rate of 7.7 percent paid annually. |
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If the yield to maturity is 8.8 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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2. Essary Enterprises has bonds on the market making annual payments, with twelve years to maturity, a par value of $1,000, and selling for $960. At this price, the bonds yield 6.5 percent. |
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what must the coupon rate be on the bonds? |
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  Coupon rate |
%Â Â |
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3. You find a zero coupon bond with a par value of $10,000 and 13 years to maturity. The yield to maturity on this bond is 5 percent. Assume semiannual compounding periods. |
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What is the price of the bond |
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  Price |
$ |
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4. Treasury bills are currently paying 5 percent and the inflation rate is 2.5 percent. |
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What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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   Approximate real rate |
% |
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5.An investment offers a total return of 18 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 14 percent. |
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What does Janice believe the inflation rate will be over the next year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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  Inflation rate |
% |
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