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Bond face value-$100, time to maturity - 5 years, coupon rate 5% redeemed at face value, what will be the ytm?
Wiki User
∙ 15y ago
The yield to maturity will be 5% since both Face Value and Redemption value are same. If you purchase the bond for 95 or 105 your yield to maturity will change than what the coupon rate is.
Wiki User
∙ 15y ago
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What is non-zero coupon bonds?
if a bond has finite maturity or limited maturity then we must consider not only the interest rate stream but also the maturity value (face value).regardsSajida Gul
What is a Zero coupon bond?
A zero-coupon bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments, or have so-called "coupons," hence the term zero-coupon bond.
How do bondholders get a return on zero coupon bonds?
Zero coupon bonds do not pay interest and are therefore sold at a steep discount to face value depending on the maturity date of the bond. Due to the time value of money, the discount on a 30 year zero coupon bond will be much greater than on a 10 year zero coupon bond. At maturity bondholders will receive the full face value of the bond which provides bondholders a return. For example, a 30 year zero coupon bond with a face value of $1,000 and sold for $500 would return a $500 profit after 30 years. Holders of zero coupon bonds can sell the bonds at any time before maturity. If an investor bought zero coupon bonds prior to a steep drop in interest rates, the value of the zero coupon bonds would increase and could be sold at a profit.
What are the basic components of bonds?
Coupon - periodical cash payment Corpus or Face Value - amount paid at maturity
What is the face Value if maturity is 7 years Coupons are paid annually at rate of 5 and Yield to maturity is 7?
You're missing one of the following: * Coupon value * Bond present/purchasing value As it stands, there's insufficient information.
What is a zero-coupon note?
A zero-coupon note is a note which pays at maturity the value of the note with no separate interest payments.
What is non-zero coupon bonds?
if a bond has finite maturity or limited maturity then we must consider not only the interest rate stream but also the maturity value (face value).regardsSajida Gul
What one of these is not usually associated with bonds a coupon rate b maturity value c face amount d maturity rate?
Coupons, face amount, maturity value and maturity rate all are associated with bonds. Coupons are a type of bond and the face amount tells how much the coupon is worth until it matures, gaining interest.
How do you calculate a bond value that has a ten-year maturity a 12 percent coupon rate with annual payments and a 1000 par value?
You would need to know a Yield To Maturity to answer this question.
What is a Zero coupon bond?
A zero-coupon bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments, or have so-called "coupons," hence the term zero-coupon bond.
How do bondholders get a return on zero coupon bonds?
Zero coupon bonds do not pay interest and are therefore sold at a steep discount to face value depending on the maturity date of the bond. Due to the time value of money, the discount on a 30 year zero coupon bond will be much greater than on a 10 year zero coupon bond. At maturity bondholders will receive the full face value of the bond which provides bondholders a return. For example, a 30 year zero coupon bond with a face value of $1,000 and sold for $500 would return a $500 profit after 30 years. Holders of zero coupon bonds can sell the bonds at any time before maturity. If an investor bought zero coupon bonds prior to a steep drop in interest rates, the value of the zero coupon bonds would increase and could be sold at a profit.
What are the basic components of bonds?
Coupon - periodical cash payment Corpus or Face Value - amount paid at maturity
What is the face Value if maturity is 7 years Coupons are paid annually at rate of 5 and Yield to maturity is 7?
You're missing one of the following: * Coupon value * Bond present/purchasing value As it stands, there's insufficient information.
Yest Corporation's bonds have a 15 year maturity a 7 percent semiannual coupon and a par value of 1000?
$10008.65
What is the formula for pricing bond after holding for sometime?
C = coupon payment n = number of payments i = interest rate, or required yield M = value at maturity, or par value
How do investors make money on zero-coupon bonds?
The bond sells at a discount from its face value--sometimes a BIG discount. At the date of maturity, the bond will give you the full face value.
How do investors make money on zero coupon bonds?
The bond sells at a discount from its face value--sometimes a BIG discount. At the date of maturity, the bond will give you the full face value.
