Question

Can someone please help me with this problem? Attached is an example to help. Thanks in advanced!

Question 2 1 pts 2. A 100 par value 15 year bond provides 10% semiannual coupons. The yield rate is 8% convertible semiannually. What is the flat price (i.e., the money that actually changes hands if the bond is sold, ignoring expenses) 9.3 years after issue at the same yield rate? (7.d-e #06] A) 111.99 B) 109.75 C) 110.31 D) 110.87 E) 111.43 A 100 par value 12 year bond provides 7% semiannual coupons. The yield rate is 5% convertible semiannually. What is the flat price (i.e., the money that actually changes hands if the bond is sold, ignoring expenses) 5.1 years after issue at the same yield rate? [7.d-e #06] n=30 F=100 r=0.0s i=0.04 Bis= 5 212 40% + 100 v'2 = 109.39 B18.6 = Bie (1.04)= [111.991 O 110.56 0 112.24 0111.12 0 110 0111.68

Answer 1

Answer_- _(6) $42.24 Given, Perjod = n = 24 semignnyal Payments face value = & loopar value Coupon Rate 7% = 0.07 ... Market. Yield 1 : 5% = 0. 05 Flat Price : Present valec of Remain in life of Bont + PV of interest We have to calulate the flat price of the bond after 5.1 years. It means that we have to calculate flat price of bond after 10.20 Sem/49044L payments cie 5.10 years X 2). - It means that we have rema 1919g life of bon! is 13.80 semiannuel_payments je 14 semlj9949prymenizi Artsy skeleting flat pilie of pont at remaining 14 semiannual payments we will multiply by fraction of market yield for remaining 0,20 sem innugl - Payment Interest = face Vglee x Gypon Pyle = 100 83.5% = 3.5 .. Flat Prjic : 3.50 a 74 1.5%. + 100 v4 of Bond (6) : 3.50X (1- 1 ) + 100 l ) 14 11,0257 0.025 1025 [3.50 X (-0,7077 1 0.015 (100 x 0.70-71). 12922 0,025 + 70.77 $ (40.91 + 70.77) Bjo . $ III.69 It is the flat price at the ent of to Glaulate the price q£ 10.20 years. 10 years. We have

Il calculated as follows you follt Bloito Bro x C1.028) - 11.69 x 1.00495 Bortom $ 112.35 at i flgt Price of Banks at 5.10 years after joue the same gield rate is $112.24, i birtola lyg p ost 10 to brod salt Anroer (6) $ 112.24 ud a