Chapter 6 Section 2
1.
Yancy purchases a 10 year zero coupon bond for 500 and will be paid 1000 at end
of 10 years.
Calculate the annual effective return received by Yancy.
2.
A 20 year bond with a par value of 10,000 will mature in 20 years for 10,500.
The coupon rate is 8% convertible semiannually.
Calculate the price that
Andrew would pay if he bought the bond to yield 6% convertible twice a year.
3.
A 20 year bond with a 20,000 par value pays semiannual coupons of 500 and is
redeemable at par.
Audrey purc
hases the bond for 21,000.
Calculate Audrey’s
semiannual yield to maturity on the bond.
4.
Book Number 1
5.
Book Number 2
6.
Book Number 3
7.
Book Number 4
8.
Book Number 5
9.
Book Number 6
10.
Marissa purchases 20 year bond.
The bond matures for 100,000.
The bond has
annual coupons.
The first coupon is 1000.
The second coupon is 2000.
The third
coupon is 3000.
The coupons continue to increase until the 20
th
coupon is 20,000.
Marissa purchase the bond to yield an annual effective rate of 8%.
Calculate the
price that Marissa pays for the bond.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview.
Sign up
to
access the rest of the document.
 Fall '08
 Staff
 Math

Click to edit the document details