Posts Tagged ‘stocks’
Corporate Bonds Market Value
December 10th, 2008
Question: A corporate bond has a coupon rate of 9%,?
A corporate bond has a coupon rate of 9%, a face value of $1,000, and matures in 15 years. Which of the following statements is most correct?
a) An investor with a required return of 10% will value the bond at more than $1,000.
b) An investor who buys the bond for $900 and holds the bond until maturity will have a capital loss.
c) An investor who buys the bond for $900 will have a yield to maturity on the bond greater than 9%.
d) If the bond's market price is $900, then the annual interest payments on the bond will be $81.
Answer: D
Mark-to-Market Debate: Private Mortgage Backed Securities
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Corporate Bonds Prices
November 12th, 2008
Question: Hyundai issued bonds on 5/20/2010 which will mature on 5/20/2025. These bonds have a $1,000 face value and wil?
Hyundai issued bonds on 5/20/2010 which will mature on 5/20/2025. These bonds have a $1,000 face value and will pay a semi-annual coupon. The basis is 0 since this is a corporate bond. The annual coupon rate is 3.75%. If the price was $800, what is the yield-to-maturity on the bonds?
Answer: 5.65%
Bond Investing : How to Determine the Selling Price of Bonds