Question: Given the following partial amortization table for a bond with a face value of $500.00, paying a semi-annual coupon, and priced to yield 7.750%

Given the following partial amortization table for a bond with a face value of $500.00, paying a semi-annual coupon, and priced to yield 7.750% compounded daily. Time K(t) I(t) PR(t) OB(t) *** 11.88 392.46 t t+1 www Compute the book value (price) OB+1. a. $451.55. O b. $435.70. O c $475.31. O d. $396.09. Oe. $431.74.

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=+ represents the likelihood of our sample result occurring, and it is abbreviated as L() 5 3 (1 2 ) 7

=+61. Refer to Exercise 46 of Section 7.4.

=+. This requires setting the derivative of L() equal to 0 and solving for . However, to simplify the calculations, we first take the natural logarithm of L() 5 3 (1 2 ) 7 : ln(L()) 5 ln33 (1 2 ) 7 4...