Please Answer the following:
1.Kenneth Clark just received a cash gift from hisgrandfather. He plans to invest in a five-year bond issued byPharoah Corp. that pays an annual coupon rate of 5.5 percent. Ifthe current market rate is 7.00 percent, what is the maximum amountKenneth should be willing to pay for this bond? (Round answerto 2 decimal places, e.g. 15.25.)
Kenneth Should Pay?
2.Oriole, Inc., hasissued a three-year bond that pays a coupon rate of 6.9 percent.Coupon payments are made semiannually. Given the market rate ofinterest of 4.8 percent, what is the market value of the bond?(Round answer to 2 decimal places, e.g.15.25.)
The Market Value is?
3.Maria Miller is interested in buying afive-year zero coupon bond with a face value of $1,000. Sheunderstands that the market interest rate for similar investmentsis 10.6 percent. Assume annual coupon payments. What is the currentvalue of this bond? (Round answer to 2 decimal places, e.g.15.25.)
Current Value of Bond ?
4.Pharoah Real Estate Company management isplanning to fund a development project by issuing 10-year zerocoupon bonds with a face value of $1,000. Assuming semiannualcompounding, what will be the price of these bonds if theappropriate discount rate is 10.0 percent? (Round answer to 2decimal places, e.g. 15.25.)
Price OF Bond ?
5.Steven Garcia bought 10-year, 11.7 percentcoupon bonds issued by the U.S. Treasury three years ago at$906.82. If he sells these bonds, for which he paid the face valueof $1,000, at the current price of $836.58, what is his realizedyield on the bonds? Assume similar coupon-paying bonds make annualcoupon payments. (Round intermediate calculations to 5 decimalplaces, e.g. 1.25145 and final answer to 2 decimal places, e.g.15.25%.)
???????Realised rate of return....%
