BOND PRACTICE PROBLEMS

# BOND PRACTICE PROBLEMS - BOND PRACTICE PROBLEMS 1 Calculate...

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BOND PRACTICE PROBLEMS 1. Calculate the current yield on the following bond: Par Value = \$1,400; Current Value = \$680; coupon interest rate = 7.5%. 2. Calculate the current yield on the following bond: Par Value = \$3,500; current value = \$1,350; coupon interest rate = 9.5% 3. Calculate the current yield on the following bond: Par Value = \$2,500; current value = \$350; coupon interest rate = 7.0% 4. Calculate the current yield on the following bond: Par Value = \$1,700; current value = \$1,450; coupon interest rate = 4.5% 5. Calculate the yield to maturity of the following bond: Par value = \$2,300; current value = \$650; the bond matures in 15 years; coupon interest rate = 6%.

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6. Calculate the yield to maturity of the following bond: Par value = \$4,300; current value = \$1,350; the bond matures in 10 years; coupon interest rate = 8.2%. 7. Calculate the yield to maturity of the following bond: Par value = \$1,800; current value = \$950; the bond matures in 8 years; coupon interest rate = 9.7%. 8. Calculate the yield to maturity of the following bond: Par value = \$8,300; current value = \$2650; the bond matures in 12 years; coupon interest rate = 5.3%.
EXAM 3 INVESTING PRACTICE PROBLEMS Question 1 If you want to have \$2.3 million dollars (\$2,300,000) in your investment account in 30 years and you can earn an annual rate of return on your investments of 9.5%, how much do you need to invest annually to have \$2.3 million dollars in 30 years? Question 2 Calculate the rate of return on a share of stock, if the stock rose from \$120 per share to \$285 per share over 1 year, while paying \$100 in dividends during the year. Question 3 If you want to have \$5.5 million dollars \$5,500,000 in your investment account in 30 years and you can get an annual rate of return of 12%, how much do you need to invest each year, beginning today, to have \$5.5 million in your investment account in the future? Question 4 Calculate the annualized rate of return on a share of stock purchased for \$52 and sold for \$109 after 13 years. Dividends paid during each year were \$3 per share. Question 5

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Calculate the rate of return on a share of stock purchased in 2004 for \$25, and sold in 2006 for \$45. During the year the stock paid \$40 in dividends. Question 6 If you can invest \$13,500 each year in an investment portfolio that generates an annual rate of return of 10.7%, how much will you have in your account at the end of 25 years? Q uestion 7 Tyler and Jasmine are taking out life insurance on Jasmine. They have 1 small child. Jasmine earns \$85,000 per year. They believe they need this coverage for the next 18 years. How much life insurance should they take out on Jasmine? Tyler believes he can get a rate of return of 8.75% on the life insurance settlement. Question 8
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BOND PRACTICE PROBLEMS - BOND PRACTICE PROBLEMS 1 Calculate...

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