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MA373 F11 Chapter 6 Homework

# MA373 F11 Chapter 6 Homework - Chapter 6 Section 2 1 2 3 4...

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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 semi-annually. 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 semi-annual coupons of 500 and is redeemable at par. Audrey purc hases the bond for 21,000. Calculate Audrey’s semi-annual 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.

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