Question

Please Answer BOTH Questions!!!

7. Lyons Holdings has a bund outstanding with 14 years to Maturity, a 120 percent nominal capn semiannual payments, and a $1.000 par valve. The band has a 60 percent nominal yield to maturity, but can be called in seven years at a price of $1,1ts. If the band is currently priced at $946.36, what is the band's nominal yield to call? a.) 9.0204. b.) 8.785% C.) 8.746% d) 8.701% €) 8.33Med en 8. Your family purchased a hase three years ago when you bought the have you financed it with a $140,000 mortgage with a 6.8 peruent nominal interest rare, with monthly payments. The mortgage was for 15 years. What is the remaining balance on your mortgage tackay a) 134,552.28 b) 140, 275.23 () 140, 100.41 d) 141,937.34 e) 112, Alef.sh. van

Answer 1

7)

3 ДА Call price (Here it is FV) 2 A Coupon rate B Number of compounding periods per year 4 $1000xA:B Interest per period (PMT) Bond price (PV) Number of years to sell Number of compounding periods till sale Bxc|(NPER) Bond yield to call 1,145 6.2% 2 31 946.36 7 RATE(NPER,PMT,-PV,FV)x2 Bond yield to call 8.785% =RATE(14,31,-946.36,1145)x2

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