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Unformatted text preview: years? 4. Calculate the YTM for a bond that was sold at 1012.8 $, has a coupon of 5 % and a time to maturity of 5 years. Calculate the YTM assuming infinite life, how much is the difference compared with the result obtained using the correct number of years? 5. The price of a 3 month t-bill was 996.37 $ in the last auction and the price of a 1 month t-bill was 999.72 $. Calculate the YTM for both t-bills, express it in yearly terms. Compare the results if you suppose simple interest and compound interest. 6. If the inflation is expected to increase, do you expect the price of bonds to increase or decrease?, explain why. 7. Explain if using the earnings statement from the financial statement of a firm is a good way to calculate its market value....
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This note was uploaded on 03/04/2009 for the course MGMT 310 taught by Professor Matthewjamesbarcaskey during the Spring '08 term at Purdue University-West Lafayette.
- Spring '08