Assignment 11: Problem 1 Previous Problem Problem List Next Problem A 9-year bond with a face value of $5000 is redeemable at par and earns interest at j2 = 9.7%. If the yield rate is j2 = 6.8%, find the book value 2 months before the payment of the 9th coupon. Use simple interest for points in time between coupon payments. Answer: $ Assignment 11: Problem 2 Previous Problem Problem List Next Problem Andrew is the CEO of Meow Co. and decides he wants to raise some capital by issuing $3000 Meow bonds paying interest at j = 10% that mature on May, 1, 2030. Keith is an investor who decides to purchase one of Andrew's Meow bonds on April 11, 2005 for $3032 plus bond interest. Keith is embarrassed owning a Meow so he sells it on January 4, 2010 for $2962 plus bond interest. Estimate Keith's yield j by the method of averages. Answer: % Assignment 11: Problem 3 Previous Problem Problem List Next Problem Mr. Weber purchases a $5000 bond, that pays interest at j2 = 10% and is redeemable at 97 in 10 years. He bought the bond at a price to yield j2 = 11.25% if held until maturity. After 6 years, he sells the bond to another investor who will yield j2 = 10.95% if held until maturity. Approximate Mr. Weber's yield on his investment over the 6-year period, using method of averages? Answer: %