Paper Title- Bond Valuation and Yields Below are four bond problems that you mus
Paper Title- Bond Valuation and Yields
Below are four bond problems that you must solve. Enter your answer and supporting calculations into a Word document and submit it. You will need to use a financial calculator or an online financial tool, but you must include what information you are entering and what you are computing in your submission. Assume the bond face value is $1,000.
• You are considering the purchase of a 7%, 15-year bond that pays interest annually. If the yield to maturity on the bond is 6%, what price will you pay? Round your answer to the nearest cent.
• What is the current yield on the bond from #1? Round your answer to the nearest tenth of a % (e.g., 12.2%).
• Assume that you purchased the bond at the price determined in #1. It is now two years later, and the bond is selling for $1,120. What is the bond’s yield to maturity at this point in time? Round your answer to the nearest tenth of a percent.
• Assume that you purchased the bond at the price determined in #1. Now you sell the bond for $1,120. Assume you receive the second year’s interest payment on the sale date. What is your rate of return on this investment? You must use a financial calculator to compute this return and round your answer to the nearest tenth of a percent.
Instructions
• You must incorporate at least four to six scholarly sources to back up your reasoning.
Your paper should meet the standard APA Requirements and MASTER’S DEGREE Level paper
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Below are four bond problems that you mus appeared first on homework handlers.
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