Bond Valuation and Yield ...
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| Bond Valuation and Yield | ||||||||||||||||||
| A bond has a par value of $1,000, pays $50 semiannually and has a maturity of 10 years. | ||||||||||||||||||
| If the bond earns 12% per year, what is the price of the bond? | ||||||||||||||||||
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| What is the yield to maturity for the bond? | ||||||||||||||||||
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| What would be the bond's price if the rate earned declined to 8% per year? | ||||||||||||||||||
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| If the maturity period is reduced to 5 years and the required rate of return is 8% what would be the | ||||||||||||||||||
| Price of the bond? | ||||||||||||||||||
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| What is the yield to maturity for the bond when the maturity is 5 years and the required rate of | ||||||||||||||||||
| Return is 8%? | ||||||||||||||||||
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| What generalizations about bond prices, interest rates and maturity periods can be made | ||||||||||||||||||
| Based on the calculation made above? | ||||||||||||||||||
| Callable Bonds | ||||||||||||||||||
| The following bonds have a par value of $1,000 and the required rate of return is 10%. | ||||||||||||||||||
| Bond XY: 5 | ||||||||||||||||||
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