Unformatted text preview: face value of the bond is $10 , 000, and the redemption amount is equal to the price of the bond, what is the price of the bond? 4. The price of a 14 year bond is $5 , 000. The face value of the loan is twice that of the redemption amount. Coupons are paid quarterly and the nominal coupon rate is 12%. The bond is priced according to a 9% annual yield. You can invest money at a 6% annual yield. What is the dierence in money earned if you invested $5 , 000 for 14 years or invested your bond payment for 14 years? 5. 6....
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This note was uploaded on 02/28/2012 for the course AMS 318 taught by Professor Timknapik during the Fall '10 term at SUNY Stony Brook.
 Fall '10
 TimKnapik

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