This preview shows pages 1–4. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: Test 3 Math 373 Spring 2010 1. Tian purchased a 10 year callable bond with a par value of 10,000. The bond matures for par and pays semiannual coupons at a rate of 8% per year. The bond is also callable at the end of years 6 through 9. The bond is callable at the following values based on the year of call: End of Year Value 6 10,600 7 10,500 8 10,400 9 10,200 Tian buys the bond to yield 6% convertible semiannually. Calculate the price that Tian paid for the bond. 2. A one year bond matures for 1000 and has annual coupons of 50. The price of this bond is 1000. A two year bond matures for 1000 and has annual coupons of 50. The price of the bond is 975. A three year bond matures for 1000 and has annual coupons of 50. The price of the bond is 950. Giving all answers as percents to 4 decimal places (e.g. 1.2345%), complete the following table: r 1 r 2 r 3 f [1,3] f [2,3] 3. Ben owns a two year bond with annual coupons of 50 and a maturity value of 1000....
View
Full
Document
This note was uploaded on 02/05/2012 for the course MA 373 taught by Professor Staff during the Spring '08 term at Purdue.
 Spring '08
 Staff
 Math

Click to edit the document details