1.Reconsider the example above, where you are contemplating the purchase of the coupon bond with a face value of $1,000, which matures in 14 years, and pays 3.15% (annual) coupons. Now, If you require a return of 3.75% on this instrument, how much would you offer to pay for it today? [Present the answer rounded to two decimal places. For instance 1045.16]
2. You are considering the purchase of a Pure Discount Bond with a Face Value of $10,000, which matures in three years. If you desire a return of 3.35%, how much would you bid for the bond today? (Round your answer to two decimal places, e.g. 9274.36) (answer was not 9058.76)
Thank you!
1.
Using financial calculator
FV=-1000
N=14
PMT=-3.15%*1000=-31.5
I/Y=3.75%
CPT PV=935.56
2.
Using financial calculator
FV=-10000
N=3*2
PMT=0
I/Y=3.35%/2
CPT PV=9051.38
1.Reconsider the example above, where you are contemplating the purchase of the coupon bond with a...
Reconsider the example above, where you are contemplating the purchase of the coupon bond with a face value of $1,000, which matures in 17 years, and pays 6.15% (annual) coupons. Now, If you require a return of 6.75% on this instrument, how much would you offer to pay for it today? [Present the answer rounded to two decimal places. For instance 1045.16]
Reconsider the example above, where you are contemplating the purchase of the coupon bond with a face value of $1,000, which matures in 17 years, and pays 6.15% (annual) coupons. Now, If you require a return of 6.75% on this instrument, how much would you offer to pay for it today? [Present the answer rounded to two decimal places. For instance 1045.16]
Finance, You are considering the purchase of a Pure Discount Bond with a Face Value of $10,000, which matures in three years. If you desire a return of 3.35%, how much would you bid for the bond today? (Round your answer to two decimal places, e.g. 9274.36) It's not 9058.76 nor 9051.38, really need help with this question can anyone tell me what am I doing wrong.
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