Question: please show all work and do not use excel or a financial calculator. The answer you get must be in the answer key posted at

please show all work and do not use excel or a financial calculator. The answer you get must be in the answer key posted at the bottom, thanks!

please show all work and do not use excel or a financialcalculator. The answer you get must be in the answer key posted

3. A company must pay liabilities of $1,000 due 6 months from now and another $1,000 due one year from now. There are two available investments: (a) 6-month zero-coupon bond, $1,000 face value and a 3% annual yield rate convertible semiannually. (b) 1-year bond, $1,000 face value, 5% nominal annual coupon rate convertible semiannually with a 6% annual yield rate convertible semiannually. Find the total cost of the bonds in order to exactly match the liabilities. Numerical answers (in random order): 6.955, 0.062, 4.5228, 6538.49, 0.04317, 2660.67, 50000, 400.36, 202.1, 3671.29, 1951.62, 4.4621

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!