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Unformatted text preview: In exercises 2.1 through 2.3, there is no uncertainty (why?). Exercise 2.4 Introduce uncertainty into the picture. How does this complicate the problem? Homework (individual) 1 In practice bonds often have features more complex than the ones described above. For example some bonds may be callable, i.e., can be redeemed at the issuers discretion, with or without paying a premium, much as you can pay off a car loan early. Identify some additional features of bond contracts (other than the call feature described above) that might complicate the simple pictures we have discussed today. Draw the associated time lines for each of these more complex bond issues. 1 Due @ the beginning of next class. Late work, work missing names & sections wont be graded. No exceptions....
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This note was uploaded on 02/16/2012 for the course ACCY 510 taught by Professor Staff during the Fall '08 term at University of Illinois, Urbana Champaign.
- Fall '08