MGT330 - Assignment 2.docx

# MGT330 - Assignment 2.docx - MGT330 ASSIGNMENT 2 Question 1...

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MGT330: ASSIGNMENT 2 Question 1 a) The RPM ticker symbol for this bond is “ 239753BC9= ”. b) Total funds raised by Target were \$200million in USD. c) No, the bond is not convertible, callable, or putable . I determined this using FactSet, Security Overview under Redemption Options . d) According to FactSet, Standard & Poor rated the bond at A . e) The bond pays interest semi-annually , and they paid it last in July 01, 2018 . f) According to FactSet, Interest % annually is 9.875%, so they pay out (FV* [Interest%/2] = \$1000 * [0.09875/2]) USD 49.375 semi-annually per 1 bond. g) According to RPM, the bond is for 109.8455% of par and the maturity price on FactSet is set at 100% of par. As the Selling Price is more than the Maturity Price (SP>MP) , the Bond is trading at a premium . h) Accrued Interest = [(Face Value * Coupon Rate)/2] * [Number of days/182] = [(1000*9.875%)/2] * [148/182] = \$40.15 per bond ( \$401.5 for 10 bonds) Flat Price (as per RPM) = \$1,098.455 per bond (i.e. 109.845% of par) ( \$10,984.55 for 10 bonds) Dirty Price = Flat Price + Accrued Interest = \$( 1,098.455 + 40.15) = \$1,138.605 per bond (i.e. 113.86% of par) ( \$11,386.05 for 10 bonds) i) using YIELD formula in EXCEL . j) Rate of Return = (P 1 – P 0 ) / P 0 = [ 1,098.044 – 1,098.455] / 1,098.455 = - 0.0374% Question 2 a) Name of ETF on RPM is ISH SP TSX ETF , and

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• Summer '14
• FengChen
• RPM

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