Question

Using the information in Table 15.5, suppose we have a bond that pays one barrel of oil in 2 years.
a. Suppose the bond pays a fractional barrel of oil as an interest payment after 1 year and after 2 years, in addition to the one barrel after 2 years. What payment would the bond have to make in order to sell for par ($20.90)?
b. Suppose that the oil payments are quarterly instead of annual. How large would they need to be for the bond to sell at par?


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  • CreatedAugust 12, 2015
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