Effects of Default Risk

Default Risk

Effects of Default Risk for $3 Only (Instant Download)

Question 12 (1 pts) This question illustrates the effects of default risk on a bond’s yield to maturity. BBB Corp has a risky bond with face value of 1,000, annual coupon rate of 10%, maturity of 5 years, and an opportunity cost of capital of 11%. If bondholders exepect that there is only a 50% chance that they will receive each of the last 3 payments, what is this bonds yield-to-maturity? Enter your answer as a perecent without the “%”; round your final answer to two decimals.

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Angsana Corporation Bond Question

Angsana Corporation Bond Question

Angsana Corporation Bond Question for $2 Only

Angsana Corporation has bonds on the market with 13.5 years to maturity, a YTM of 8 percent, and a current price of $1,065.32. The bonds make semiannual payments. The coupon rate on these bonds must be ____________percent. (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

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Question on Yield to Maturity

Question on Yield to Maturity

Question on Yield to Maturity for $2 Only (Instant Download)

The yield to maturity on one-year zero coupon bonds is 5.64%. The yield to maturity on two-year zero coupon bonds is 7.42%.


a. What is the forward rate of interest for the second year? (Round your answer to 2 decimal places.)

Forward rate            %

b. According to the expectations hypothesis, what is the expected value of the one-year interest rate for next year? (Round your answer to 2 decimal places.)

Expected value            %

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