Question

QUESTION 21 What s the present value of the fog ca Cve ean at a rate of 12 Year CF: $75 $225 30 174699 b $02034 c$687 61 ed $436 99 QUESTION 22 5-year Treasury bonds yield 44% these bonds Theinf.tenpremu m P)is 19%, a dbamatuity-sk premnmMP) on5ywrtbont""04% t is the real risk-free rate, Then "sium -um" 440% 21% 1 9% @ 0 4% QUESTION 23 cyea mataiy A companys bonds currenadly sell for 31,175 They pay a 190 anusl coupon, hare a 2 Assame that no costs other than the call premsam would be incurred to call and refiand the bonds, and also assure that the yoeld curve i hootal wth es epetedto reman at current levels on into the future What is the da airwer) $1.000 par valn, bu tey can be called 5 yes a a 1 20% 0b147% c1.68% Cliok Save and Submit to save and submit.Click Save All Ansuwers to sqve all anwers

Answer 1

(21) Yearly Cash Flows:

Year 1 = $ 75, Year 2 = $ 225, Year 3 = $ 0 and Year 4 = $ 300

Interest Rate = 12 %

Total Present Value of Cash Flow Stream = 75 / (1.12) + 225 / (1.12)^(2) + 0 / (1.12)^(3) + 300 / (1.12)^(4) = $ 436.9883 ~ $ 436.99

Hence, the correct option is (d)

NOTE: Please raise separate queries for solutions to the remaining unrelated questions as one query is restricted to the solution of only one complete question with a maximum of four sub-parts.