This preview shows pages 1–2. Sign up to view the full content.
Solution to C298 Practice Problem Set #6
(2010W)
1.
so the realized return will be
r=
=
=
16.67%
2.
so the realized return will be
=
=
16.63%
3.
=
=
=
$21
4.
=
30
=
6
!
30g
=
3
g
=
0.10
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document 5.
We know that
F
= 1000,
c
= 0.07, and
cF
= 70.
First, we must calculate the price of the bond today:
=7
0
=
672.25 + 231.71
=
903.96
Then, we can calculate our realized return over the past year:
r =
0
6.
a)
D = 1.00
1
D = 1.00(1.18) = 1.18
2
D = 1.18(1.12) = 1.3216
3
D = 1.3216(1.12) = 1.480192
This is the end of the preview. Sign up
to
access the rest of the document.
This note was uploaded on 09/01/2011 for the course COMM 298 taught by Professor Freedman during the Spring '09 term at The University of British Columbia.
 Spring '09
 FREEDMAN

Click to edit the document details