This preview shows page 1. Sign up to view the full content.
Unformatted text preview: P as the ﬁrst payment and then grow by 10% quarterly. Find P . Q6. A 30-year bond has 9% annual coupons and a face value of $1,000. It is redeemed at par. Coupons are reinvested at nominal rate of 6% convertible semi-annually. Find the bond price P such that the overall yield for the investor is 10% eﬀective per year. Q7. A $1,000 bond with a coupon rate of 9% per year payable semiannually is redeemed at $1,125 after an unspeciﬁed number of years. The yield of this bond is 10% convertible semiannually. If the present value of the redemption value is $225 at this yield rate, ﬁnd the bond price. Q8. A $1,000 bond with a coupon rate of 6% per year payable semiannually is redeemed at par on July 1, 2017. Its purchase price on July 1, 2009 is 1015.85. Find its book value on January 1, 2012. 1...
View Full Document
This note was uploaded on 01/21/2011 for the course ACTSC 231 taught by Professor Chisholm during the Fall '09 term at Waterloo.
- Fall '09