Pfv1rn360 pfv1rn360 r1pfv360n1 ymmip360n ipymmn360

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Unformatted text preview: 311,138.16 = $206,591.84 > 0 Call the bonds Problem 2: Market value of the bond: N = 12 x 2 = 24 I/Y = ‐2/2 = ‐1 PMT = 50 FV = 1000 CPT PV = 2,636.71 Max P of stock = 65.92 LECTURE NOTES #5: Problem 1: n = 171 YMM = 8.9% Ask Price = r = ? P = FV (1 – r (n/360)) P/ FV = 1 – r(n/360) r = (1 – P/FV)(360/n) [1] Y.MM = (I/P)(360/n) I/P = Y.MM (n/360) I = P Y.MM(n/360) FV – P = P Y.MM (n/360) FV = P (1 + Y.MM(n/360)) P/FV = 1/(1 + Y.MM(n/360)) = 1/(1 + 0.089*(171/360)) = 0.959439687...
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This document was uploaded on 03/30/2014.

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