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8.1 Valuing Bonds What is the price of a 10-year,...

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8.1 Valuing Bonds What is the price of a 10-year, zero coupon bond paying $1,000 at maturity if the Yield to Maturity is: a. 5 percent? b. 10 percent? c. 15 percent? 8.5 Valuing Bonds Even though most corporate bonds in the U.S. make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of ?1,000, 15 years to maturity and a coupon rate of 8.4 percent paid annually. If the yield to maturity is 7.6 percent, what is the current price of the bond? 8.9. Nominal and Real Returns An investment offers a 17 percent total return over the coming year. Alan Wingspan thinks the total real return on this investment will be only 11 percent. What does Alan believe the inflation rate will be over the next year?

 

Paper#6979 | Written in 18-Jul-2015

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