Question: please solve these problems without using excel and show all steps. Question No.2 Aurora purchased a newly-issued 30-year bond that pays semi-annual coupons at an
Question No.2 Aurora purchased a newly-issued 30-year bond that pays semi-annual coupons at an 8% (annual) rate. The bond has a par value (and a redemption value) of 1,000. The bond is callable on or after its 15th anniversary with a 15% premium (i.e. 1,150 is payable if it is called). Aurora purchased this bond at issue at a price that will assure her a rate of return of at least 7.8% (a nominal rate, convertible semi-annually). If the bond is called on its 18th anniversary, what is Aurora's actual rate of return, convertible semi-annually? A. 8.035% B. 8.135% C. 8.235% D. 8.335% E. 8.345% Question No.3 Lawrence opens a bank account with $1,100 and lets it accumulate at an annual nominal interest rate of 4.2% convertible semiannually. Dennis also opens a bank account with $1,000 at the same time as Lawrence, but it grows at an annual nominal interest rate of 2.1% convertible monthly. For each account, interest is credited only at the end of each interest conversion period. Calculate the number of months required for the amount in Lawrence's account to be at least double the amount in Dennis's account. A. 348 B. 349 C. 354 D. 355 E. 360
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