A S10 000, 10.5% bonds with quarterly coupons is redeemable at par on August 1, 2025....
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A S10 000, 10.5% bonds with quarterly coupons is redeemable at par on August 1, 2025. a) Find the cash price five years before maturity if the market rate is 10.5% compounded quarterly. b) Find the cash price two years before maturity if the market rate is 8.5%, compounded quarterly. c) Find the cash price 23 months before maturity if the market rate is 8.5%, compounded quarterly. A S10 000, 10.5% bonds with quarterly coupons is redeemable at par on August 1, 2025. a) Find the cash price five years before maturity if the market rate is 10.5% compounded quarterly. b) Find the cash price two years before maturity if the market rate is 8.5%, compounded quarterly. c) Find the cash price 23 months before maturity if the market rate is 8.5%, compounded quarterly.
Expert Answer:
Answer rating: 100% (QA)
To compute for the cash price of the bond we have to compute for the present value of the face amount of the bond and the present value of its interest payments a Time 5 years market rate105 compounde... View the full answer
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
Posted Date:
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