UGBA 103
Summer 2010
Haas School of Business
John Gonzales
Assignment #2 (Due June 1)
All bonds have a par of $1,000.
1.
Do problems 215 through 217, 220, 227 and 228 on pages 7678 of the text. For
220(a), you need to calculate the annual payment.
You do not need to set up the
amortization schedule.
2.
Do problems 33 through 36, 310, 311 and 312 on pages 115117 of the text.
3.
Find the price of a 14year bond that has a coupon of 7.50% and par of $1,000. The
market interest rate is 7.21%.
4.
Find the price of a 14year, $1,000 par, zerocoupon bond given that the market
interest rate is 7.21%.
5.
Find the new price of the bond in (3) if the market interest rate decreases to 6.88%.
6.
Find the new price of the bond in (3) if the market interest rate increases to 7.70%.
7.
Find the price of a 4year bond that has a coupon of 8.44%
(paid quarterly) and par of
$1,000.
The market interest rate is 7.80%.
8.
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 Summer '10
 JohnGonzales
 5.20%, 5.56%, John Gonzales, 5.50%, 5.16%

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