ACTSC 231 Winter 2019 Chapter 6 Examples - Jan 27.pdf - Lecture 27 Chapter 6 Examples ACTSC 231 — Introductory Financial Mathematics Spring 2018

ACTSC 231 Winter 2019 Chapter 6 Examples - Jan 27.pdf -...

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Lecture 27: Chapter 6 Examples ACTSC 231 — Introductory Financial Mathematics Spring 2018 Chapter 6 Examples 1 / 7
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Example 1 A 10,000 par value 10-year bond with 8% annual coupons is bought at a premium to yield an annual effective rate of 6%. Calculate the interest portion of the 7th coupon. Chapter 6 Examples 2 / 7
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Example 2 (Textbook, 6.5, B #4 Modified) A National Auto Company Limited $1000 bond is due at par on December 1, 2021. It has semi-annual coupons paid at nominal rate 7%. Determine the dirty (purchase) price and the clean price for this bond on August 8, 2010 if the yield is to be i ( 2 ) = 6 % Chapter 6 Examples 3 / 7
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Example 3 (Textbook 6.4, #2) A $5000 6% bond with semi-annual coupons is redeemable at par in 20 years. It is callable at 105 in 15 years. Determine the price to guarantee a yield rate of i ( 2 ) = 5 % . Chapter 6 Examples
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  • Fall '09
  • Chisholm
  • Finance, 142857, par value 10-year bond, end of any year

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