BUS218 Solutions Chapter 11

BUS218 Solutions Chapter 11

Info icon This preview shows pages 1–2. Sign up to view the full content.

BUS218 Solutions Chapter 11 1. Calculator solution is: N = 10  I = 3 PMT = 40  FV = 1000  CPT PV = –1085.30 2. Bond prices using annual compounding: a. N = 15  I = 8 PMT = 50  FV = 1000  CPT PV = –743.22 b. N = 20  I = 6 PMT = 75  FV = 1000  CPT PV = –1,172.05 The first bond has the lower price.  No calculations are really necessary for this problem  because the first bond is obviously a discounted bond (YTM > coupon rate) and the second  is obviously a premium bond (YTM < coupon rate). 4. Annual compounding
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern