Question: 2a (0 .05 / 2) X100 = 2.5 TaDE 30% X 2 -5 = 0. 75 Neet Coupon 215 -125 = $ 175 175 1,75

2a (0 .05 / 2) X100 = 2.5 TaDE 30% X 2 -5 = 0. 75
2a (0 .05 / 2) X100 = 2.5 TaDE 30% X 2 -5 = 0. 75 Neet Coupon 215 -125 = $ 175 175 1,75 1575 135 1,75 100 Clavie 2 1 12 135 14 : Po Je = 1 6% EOVIP, = 1. 75 97 + 102028 @1,67. = $103. 364 ( part (00 force value) 25 215 2 5 2b 2.5 25 100 Claire 132 14 14 2 15 ? SOV: P = 2.5 Ong7 +10ON - 1.75 927 @ 1. 6 % - (1-0.3v) 2 5057 +10ON @1-69. = 0. 7047244 x 2.5*22. 42 6599 + 100* 0. 641174405 = 39, 5/143 + 64. 117 405 = $103. 629 (per 100 face value) C In a investor will use the coupon less take thence the price is lower, however in b' the investor users full coupon allowing For tess at the and therefore the price is higher. 25 as 25 bo 95: 2652 1 1/2 13- 2 14 sov: 95. 268 = 2.5 #2 43 toov @ i 28 yield = C+ (100-p ) in 12 (rootp ) Scanned with CamScanner 2 = 2:5 + ( 100 - 95. 268) ; 28 2 ( 100+ 95. 268 ) i = 01027% ( approx per k year) 2.5 azg tioov @ 27%. = 96, 10 6 96. 106 6 95. 268 Try 2.8% 215 ations@ 2.8% 94:231 Using linear interpolation. ( i-0. 029) / (01027 -0N028) = (95,268- 94,231) /( 96. 106-94, 231) 1 = 0. 02745 12 = 5.570

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