Supplemental Problems: 1.
i (m) 1 + m i (2m) = 1 + 2m
m
2m
i (m) 1 + m
m + i (m) m
2m + i ( 2 m ) = 2m
(4m 2 )(m + i ( m ) ) = m 4m 2 + i ( 2 m ) 4m 2 + 4mi ( m ) = 4m 2
Solutions to Supplemental Problems for HW #8
1. A $1, 000 10% 10-year bond is purchased at issue for $880 and is redeemable for $1, 020. Find the yield rate for this bond (expressed as a nominal annua