Questions from General Investment


Q: A bond is priced in the market at $1,185

A bond is priced in the market at $1,185 and has a coupon of 7%. Calculate the bond’s current yield.

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Q: A $1,000 par value bond with a 7.

A $1,000 par value bond with a 7.25% coupon rate (semiannual interest) matures in seven years and currently sells for $987. What is the bond’s yield to maturity and bond equivalent yield?

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Q: What is the current yield for a $1,000 par

What is the current yield for a $1,000 par value bond that pays interest semiannually, has nine years to maturity, and is currently selling for $937 with a bond equivalent yield of 12%?

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Q: An investor is considering the purchase of an 6%, 15-

An investor is considering the purchase of an 6%, 15-year corporate bond that’s being priced to yield 8%. She thinks that in a year, this bond will be priced in the market to yield 7%. Using annual co...

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Q: An investor short sells 75 shares of a stock for $69

An investor short sells 75 shares of a stock for $69 per share. The initial margin is 60%, and the maintenance margin is 40%. The price of the stock rises to $82 per share. What is the margin, and wil...

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Q: You notice in the WSJ a bond that is currently selling in

You notice in the WSJ a bond that is currently selling in the market for $1,070 with a coupon of 11% and a 20-year maturity. Using annual compounding, calculate the promised yield on this bond.

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Q: Lynn Parsons is considering investing in either of two outstanding bonds.

Lynn Parsons is considering investing in either of two outstanding bonds. The bonds both have $1,000 par values and 11% coupon interest rates and pay annual interest. Bond A has exactly 5 years to mat...

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Q: A bond is currently selling in the market for $1,

A bond is currently selling in the market for $1,085.96. It has a coupon of 8% and a 15-year maturity. Using annual compounding, calculate the yield to maturity on this bond.

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Q: CSM Corporation has a bond issue outstanding that has 15 years remaining

CSM Corporation has a bond issue outstanding that has 15 years remaining to maturity and carries a coupon interest rate of 6%. Interest on the bond is paid on a semiannual basis. The par value of the...

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Q: Compute the current yield of an 8%, 20-year bond

Compute the current yield of an 8%, 20-year bond that is currently priced in the market at $1,150. Use annual compounding to find the promised yield on this bond. Repeat the promised yield calculation...

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