Suppose there are bonds = 263 million Exchange rate = $1.5575 Bonds worth = 263 x 1.5575

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Suppose there are bonds = £263 million

Exchange rate = $1.5575

Bonds worth = 263 x 1.5575 = $409.6225

Therefore bonds are worth = 409.6225

Based on the calculation on the above, what is the premium (discount) of this bond compared to the par value? Is this premium similar to the premium that is observed in the market today of a little over 11%? If there is a difference, why is that so?

Related Book For answer-question

Microeconomics An Intuitive Approach with Calculus

ISBN: 978-0538453257

1st edition

Authors: Thomas Nechyba

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Posted Date: Apr 10, 2023 01:35 AM

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Suppose there are bonds = 263 million Exchange rate = $1.5575 Bonds worth = 263 x 1.5575

Question:

Expert Answer:

Answer 1 The premium discount of this bond is calculated by subtracting the bonds market price fro... View the full answer

Microeconomics An Intuitive Approach with Calculus

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