Unformatted text preview: in at a price of $20. Your broker offers a minimum
margin requirement of 80%. You decide to later sell your shares when the market price
increases to $23.
a) What is your capital gain or loss?
b) If the price decreased to $15 before you sold your shares, what would be the amount
of the margin call? Raising Marks. Raising Money. Raising Roofs.
www.schoolsos.com Students Offering Support: Wilfrid Laurier University Bonds
Face Value = the fixed amount the holder of the bond will receive at expiry = $1000
Coupon Rate = fixed rate of interest the bond hold receives in semi-annual payments
Discount = the price of the bond is less than its face value
Premium = the price of the bond is greater than its face value
Par = the price of the bond is equal to its face value
Approximate Yield to Maturity = the return that the bond provides, expressed as a % of its
current purchase price Steps to Success – Pricing a Bond with TVM:
4. Calculate the semi-annual coupon payments
Calculate the interest rate per payment period
Calculate the present value of the coupon payments (ordinary annuity)
Calculate the present value of the face value received upon maturity...
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This note was uploaded on 02/07/2014 for the course BU 111 taught by Professor Jessicastockie during the Fall '08 term at Wilfred Laurier University .
- Fall '08