Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. in 2012, jim ayers bought five ltv 6s28 bonds for

In 2012, Jim Ayers bought five LTV 6s28 bonds for which he paid 88. Three years...

80.2K

Verified Solution

Question

Finance

In 2012, Jim Ayers bought five LTV 6s28 bonds for which he paid88. Three years later, he sold the bonds at 84 and bought fiveSouthern Electric 9 1/2 s 30 bonds at 95. Did he increase ordecrease the original rate of yield to maturity, and, if so, by howmuch? Assume the par value of each bond is $1,000. If requiredround annual discount amortization to the nearest cent. Roundyields to maturity to one decimal place. Enter your answer as apositive value.

Answer & Explanation Solved by verified expert
3.5 Ratings (454 Votes)
First we need to calculate YTM for both the bonds Jim purchased 6s28 purchased at 88 in 2012 and sold it in 2015 at 84 Face value 1000 Price of bond when purchased in 2012 88 value of bond    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

In 2012, Jim Ayers bought five LTV 6s28 bonds for which he paid88. Three years later, he sold the bonds at 84 and bought fiveSouthern Electric 9 1/2 s 30 bonds at 95. Did he increase ordecrease the original rate of yield to maturity, and, if so, by howmuch? Assume the par value of each bond is $1,000. If requiredround annual discount amortization to the nearest cent. Roundyields to maturity to one decimal place. Enter your answer as apositive value.

Other questions asked by students

Chemistry
1.2K views

Consider each of the following ideal geometries for MXn molecules (n = 3-6) and thte distortions...

Chemistry
1.2K views

A mixture of propan-1-ol and 2-methylpropan-2-ol of unknown content may also contain a small amount of...

Biology
1.2K views

Double fertilization occurs in OA angiosperms OB gymnosperms C psilophytes D neither gymnosperms nor angiosperms...

Basic Math
1.2K views

Solve this system of linear equations x 3y 4z 4 3x7y 7z 8 4x 6y...

Basic Math
1.2K views

For mallard ducks and Canada geese what percentage of nests are successful at least one...

Calculus
1.2K views

Simplify Enter the result as To enter the log click in the Then click the...

Calculus
1.2K views

Consider the function f x 2x 3x 72x 2 on the interval 6 8 Find...

Algebra
1.2K views

Find the least squares line given the matrix products AT A ATb 1946 3 39353...

Accounting
1.2K views

Timmy puts in cash of $15,000 for a 33% interest in Lassie Enterprises, a partnership....

Accounting
1.2K views

Required information [The following information applies to the questions displayed below.) At the beginning of...

Accounting
1.2K views

16. Dalbeck, a CPA, serves on the Alumni Admissions Committee of his alma mater. As...

Finance
1.2K views

A bond has a $1,000 par value, 10 years to maturity, and a 7% annual...