How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Linda_us Your Own Question

Linda_us
Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7018
Experience:  Post Graduate Diploma in Management (MBA)
Type Your Homework Question Here...
Linda_us is online now
A new question is answered every 9 seconds

A bond with 5 years to maturity and a coupon rate of 6% has

Customer Question

A bond with 5 years to maturity and a coupon rate of 6% has a face value of $20,000.
Interest (coupon payment) is paid annually
a. If an investor's required rate of return is 7% on this bond, how much is this investor
willing to pay for this bond?
b. Please use this bond as an example, to explain the relationship that exists between
the following elements of a bond: coupon rate, required rate of return (YTM), par value,
and bond price.
Submitted: 4 years ago.
Category: Homework
Expert:  Linda_us replied 4 years ago.
HiCustomerbr />
a) If an investor's required rate of return is 7% on this bond he would be willing to pay 19179.96.

Click here for details

b) If required rate of return(YTM) is greater than coupon rate then bond price is less than face value and if required rate of return(YTM) is less than coupon rate then bond price is more than the face value of the bond. Since in the current case YTM of 7% is greater than coupon rate of 6% hence the bond value is 19179.96 which is less than the face value.

Regards

Linda
Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7018
Experience: Post Graduate Diploma in Management (MBA)
Linda_us and 4 other Homework Specialists are ready to help you
Customer: replied 4 years ago.
Can you help me with another question?
Expert:  Linda_us replied 4 years ago.
HiCustomer

I can try. You can accept this post if you are satisfied and then post your second question in a second post.

Regards

Linda
Customer: replied 4 years ago.
Suppose you bought the following bond for $1100. The bond has a face value of $1000,
annual coupon rate 10% payable annually, and matures in 2 years. Please answer the
following questions:
a. What is the bond's current yield?
b. What is the bond's yield to maturity?
c. Exactly one year later, interest rate rises to 15% due to inflation increase. If your
holding period is only one year, i.e., you have to sell the bond after one year, what price
would you end up selling at? What will be your rate of return for holding this bond for one
year?
d. Please use this bond as an example to explain the interest rate risk when investing in
bonds.
Customer: replied 4 years ago.
Did you get the 2nd question? I gave you 10 dollars,will that work?
Expert:  Linda_us replied 4 years ago.
THIS ANSWER IS LOCKED!

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7018
Experience: Post Graduate Diploma in Management (MBA)
Linda_us and 4 other Homework Specialists are ready to help you
Customer: replied 4 years ago.
Linda, you are amazing, this works!

Can you shoot me your email, I would love to get with you from here on out on my homework to double check it. I have 4 more classes and my homework questions consist of minimal questions - so no room for error.

If this is the best way, I will look for you. Do i just ask for you? What hours are you online? Thank you so much!

JoshXXX@XXXXXX.XXX
Expert:  Linda_us replied 4 years ago.
HiCustomerbr />
I can't share my email id it against the policy. In future you can post your question in JA and address them to me by writing "FOR LINDA" in front of your post. I am usually online and I will try to complete your question ASAP.

Regards

Linda

Customer: replied 4 years ago.
Perfect, thank you so much! Did you get your money? I want to make sure you're taken care of... thanks!
Expert:  Linda_us replied 4 years ago.
Yes I got it.

Thanks for quick acceptance and positive feedback.

Regards

Linda

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
< Last | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther Woodstock, NY
  • Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. Robin Elkton, Maryland
  • He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here. Diane Dallas, TX
 
 
 

Meet The Experts:

 
 
 
  • Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    4520
    More than 5000 online tutoring sessions.
< Last | Next >
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    4520
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/LI/lindaus/2012-6-10_04811_IMG20120609164157.64x64.jpg Linda_us's Avatar

    Linda_us

    Finance, Accounts & Homework Tutor

    Satisfied Customers:

    3121
    Post Graduate Diploma in Management (MBA)
  • http://ww2.justanswer.com/uploads/ComputersGuru/2010-02-13_051118_Photo41.JPG LogicPro's Avatar

    LogicPro

    Engineer

    Satisfied Customers:

    3035
    Expert in Java C++ C C# VB Javascript Design SQL HTML
  • http://ww2.justanswer.com/uploads/lanis/2009-4-1_233717_phput9xef_c1pm.jpg Lani S.'s Avatar

    Lani S.

    Tutor

    Satisfied Customers:

    2457
    Registered Nurse, Internet Researcher, Private Tutor
  • http://ww2.justanswer.com/uploads/chooser77/2009-08-18_162025_Chris.jpg Chris M.'s Avatar

    Chris M.

    M.S.W. Social Work

    Satisfied Customers:

    2341
    Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)
  • http://ww2.justanswer.com/uploads/JawaadAhmed/2009-6-27_12137_SIs_SHadi.jpg F. Naz's Avatar

    F. Naz

    Chartered Accountant

    Satisfied Customers:

    1975
    Experience with chartered accountancy
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg Bizhelp's Avatar

    Bizhelp

    CPA

    Satisfied Customers:

    1873
    Bachelors Degree and CPA with Accounting work experience