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Unformatted text preview: C. 5.20% D. 5.50% 6. A convertible bond has a par value of $1,000 but its current market price is $950. The current price of the issuing company's stock is $19 and the conversion ratio is 40 shares. The bond's conversion premium is _________. DePaul University Page 2 Winter Quarter, 2010 FINANCE 330 INVESTMENT ANALYSIS QUIZ 10 7. One year ago, you purchased a newly issued TIPS bond that has a 6% coupon rate, five years to maturity, and a par value of $1,000. The average inflation rate over the year was 4.2%. A) What is the current face value of the bond and B) what is the amount of the coupon payment you will receive? C) What was the nominal return and D) what was the real return? (4 points) 8. A bond is quoted in the Wall Street Journal at 99.0. The coupon rate is 8%, paid semiannually (every 182 days) and 40 days have passed since the last coupon payment. What is the invoice price of the bond, including accrued interest? (2 points)...
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This note was uploaded on 09/26/2011 for the course FIN 334 taught by Professor Fin334 during the Winter '10 term at Ill. Chicago.
 Winter '10
 FIN334

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