Fixed_Income Chapter 5 -...

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Chapter 5 – Introduction to the Valuation of Fixed Income Securities 1) An analyst observes a 5-year, 10% coiupon bond with semiannual payments. The face  value is £ 1,000. How much is each coupon payment? a. £50 b. £25 c. £500 d. £100 2) A 20 year, 10% annual pay bond has a par value of $1,000. What would this bond be  trading for if it were being priced to yield 15% as an annual rate? a. $685.14 b. $687.03 c. $828.39 d. $832.40 3) An analyst observes a 5 year, 10% semiannual pay bond. The face amount is €1,000.  The analyst believes that the yield to maturity for this bond should be 15%. Based on  this yield estimate, the price of this bond would be: a. €828.40 b. €832.39 c. €1,189.53 d. €1,193.04 4) Two bonds have a par values of $1,000. Bond A is a 5% annual pay, 15 year bond  priced to yield 8% as an annual rate; the other (Bond B) is a 7.5% annual pay, 20 year 
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This note was uploaded on 11/06/2010 for the course ECON Econ taught by Professor Liasa during the Spring '10 term at University of San Francisco.

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Fixed_Income Chapter 5 -...

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