assignmnt1 - ACTSC445/845 ASSIGNMENT 1. DUE ON OCT, 8TH IN...

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ACTSC445/845 ASSIGNMENT 1. DUE ON OCT, 8TH IN CLASS (1) (10 points) A 5-year bond with semiannual coupons is redeemable at par. The annual effective yield is 7% and the coupons are 5% a year. Find the price of this bond per $100 par value. Is it sold at a discount or a premium? (2) (10 points) A corporate bond pays semiannual coupons at a coupon rate of 8% (annualized rate). The bond is priced to yield 6% compounded semiannually. The bond matures on June, 1 , 2008 and is purchased with a settlement date of Oct, 1 , 2003. Determine the full price of the bond as of the settlement date and the price quoted (clean price). (using day count basis.) (3) The following table gives the price at different dates for a three-year 4% bond that pays semi-annual coupons and has a face value of 10 , 000. i date price 1 01/01/2007 (issue date) 10,188.40 2 01/07/2007 10,129.22 3 01/01/2008 10,129.12 4 01/07/2008 10,119.37 5 01/01/2009 10,069.05 6 01/07/2009 10,024.08 (a) (10 points) Compute the yields y i
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assignmnt1 - ACTSC445/845 ASSIGNMENT 1. DUE ON OCT, 8TH IN...

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