ACTSC 231 soln-ch06-examples6.1-6.8

ACTSC 231 soln-ch06-examples6.1-6.8 - Examples Example 6.1:...

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Unformatted text preview: Examples Example 6.1: A 15-year $100 5% bond with semi-annual coupons is bought to give the investor an annual effective yield rate of 5.5%. Find its price. Example 6.2: A 2-year $1,000 bond pays coupon semi-annually at a rate of 9% and is redeemable for $1,050. Find the purchase price to yield an annual rate of 10% compounded daily. Assume we have 365 days in one year. C. Weng (c2weng@uwaterloo.ca) p. 5/ ? ? Example 6.3: Yield rate in bonds Example 6.3: A 12-year $2,000 8% par-value bond with quarterly coupons is bought for $2,200. Find the effective yield rate per coupon period j , the annual effective yield i , and the nominal yield rate i (4) convertible quarterly. C. Weng (c2weng@uwaterloo.ca) p. 8/ ? ? Example 6.4: varying coupon rate Example 6.4: A 20-year $1,000 bond with semi-annual coupons is redeemed at par and has a nominal coupon rate of 8% for the first 5 years, 9% for the next 5 years, and 10% for the final ten years. Amy purchases the bond so as to receive a nominal yield of 9.2%. How much does she pay?...
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This note was uploaded on 01/21/2011 for the course ACTSC 231 taught by Professor Chisholm during the Fall '09 term at Waterloo.

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ACTSC 231 soln-ch06-examples6.1-6.8 - Examples Example 6.1:...

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