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PPT Corrections

PPT Corrections - PPT Corrections Ch 6 Bonds Part I...

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PPT Corrections

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Ch 6 – Bonds Part I
Calculating Price of a Zero-Coupon Bond • Using same data: • Price of a 10-year zero-coupon bond = \$1000 = \$385.54 (deep discount) (1.1) 10 • Price of a 30-year zero-coupon bond = \$1000 = \$57.31 (very deep (1.1) 30 discount) corrected

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Ch 6 – Bonds Part II
5. A Coupon Bond Consists of Zero-Coupon Bonds • Coupon bond is a portfolio of zero coupon bonds • 3-year 8% coupon (annual) bond consists of three zero-coupon bonds: – First year coupon: 1-year zero coupon bond – Second year coupon: 2-year zero coupon bond – Third year coupon: 3-year zero coupon bond – Third year face value: 3-year zero coupon bond four

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Ch 9 – Stocks Part I
Case 2 - Constant Dividend Growth P 0 = Div 1 + Div 1 (1+g) + Div 2 (1+g) 2 + …… 1+ r E (1+r E ) 2 (1+r E ) 3 0 1 2 3 N -P 0 Div 1 Div 1 (1+g) Div 1 (1+g) 2 Div 1 (1+g) N Correction – Div 1

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Ch 11 – Systematic Risk Part II
The Security Market Line (SML) • The CAPM equation implies that there is a linear relation

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PPT Corrections - PPT Corrections Ch 6 Bonds Part I...

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