# finance

The Corner Grocer has a 7-year, 6 percent annual coupon bond outstanding with a \$1,000 par value. The bond has a yield to maturity of 5.5 percent.
Which one of the following statements is correct if the market yield suddenly increases to 6.5 percent?

The bond price will increase by \$57.14.

The bond price will increase by 5.29 percent.

The bond price will decrease by \$53.62.

The bond price will decrease by 5.43 percent.

The bond price will decrease by 5.06 percent.

1. 👍
2. 👎
3. 👁
4. ℹ️
5. 🚩
1. Ravi Industries bond has a 12 percent coupon rate and Rs.1,000 face value.
Interest is paid on annual basis, and the bond has 10 years to maturity. If
3
investors require a 14 percent yield, what is the bond’s value? What is the
effective annual yield on the bond? (

1. 👍
2. 👎
3. ℹ️
4. 🚩
2. 56

1. 👍
2. 👎
3. ℹ️
4. 🚩

## Similar Questions

1. ### Finance

Suppose the September CBOT Treasury bond futures contract has a quoted price of 89-09. What is the implied annual interest rate inherent in this futures contract? Assume this contract is based on a 20 year Treasury bond with

2. ### Math

The Garraty company has two bond issues outstanding. Both bonds pa \$100 annual interest plus \$1,000 at maturity. Bond L has a maturity of 15 years and Bond S a maturity of 1 year. A). What will be the value of each of these bonds

3. ### FINANCE

Yield to call Six years ago, the Singleton Company issued 20-year bonds with a 14 percent annual coupon rate at their \$1,000 par value. The bonds had a 9 percent call premium, with 5 years of call protection. Today, Singleton

4. ### Finance

A company issues a 10,000 par value 10-year bond with 8% annual coupon payments. If the yield rate is 6%, calculate the price of this bond.

1. ### Finance

A 20-year, \$1,000 par value bond has a 9% annual coupon. The bond currently sells for \$925. If the yield to maturity remains at its current rate, what will the price be 5 years from now

What is the rate of return on a \$10,000 bond purchased at \$8,750 with a 10% coupon? The 10% coupon guarantees a return of \$1,000 on the nominal value of the bond, which is \$10,000. The bond's actual sale price was \$8,750, so the

3. ### Finance

Brown Enterprises’ bonds currently sell for \$1,025. They have a 9-year maturity, an annual coupon of \$80, and a par value of \$1,000. What is their current yield? 7.80% 7.90% 9.00% 9.10% 9.20%

4. ### Finance Challenge

The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of 3 percent to account for this increased

1. ### Corporate Finance

Bond price: Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar bonds is currently 9 percent. Assuming annual payments, what is the present value of the bond? (Round to the nearest

2. ### Finance

A three-year bond has 8.0% coupon rate and face value of \$1000. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semi-annual coupon interest payments.

3. ### Finance

Suppose that five years ago Cisco Systems sold a 15-year bond issue that had a \$1,000 par value and a 7 percent coupon rate. Interest is paid semiannually. a. If the going interest rate has risen to 10 percent, at what price would

4. ### Finance

Which of the following statments is CORRECT? a. Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium above par. The premium bond must have a lower current