Question

QUESTION 14 The MO Company currently has one bond issue outstanding. This bond pays a coupon rate of 10% $100 per years and matures in five years, and has a par value of $1.000. If you require a 15% rate of retum What is the catalans i tot his band in the first Assuming this is an emanual bond 2.383 QUESTION 15 The MO Company currently has one bond issue outstanding. This band pays a coupon rate of 10% $100 per year and matures in the ye of $1.000 If you require a 15 rate of retur, How much would you be w a y for each of Notte Com bands. Assuming. This is al bond 32392 828.40 811.050 952.365 QUESTION 16 You are holding a portfolio with the purpose of diversifying Below are several different companies that you have that you have considered to invest in, along with the correlation coefficient of each company with your current por would achieve the LEAST reduction in the risk of your portfolio? Apple 0.30 Google, 0.00 Walmart. 0.32

Answer 1

14: 3.038%

15: $828.40

Q14	Price at start of Year 1	$828.40
	Price at end of Year 1	$853.57
	Capital gain	3.038%
Q15	Price of bond	$828.40

Workings

AutoSave o 9.3HD Book1 - Excel Sign in File Home Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do 11 Calibri BIU - B Insert - Delete - Format - 0 X Share Comments AY O Sort & Find & Filter - Select Editing Paste La e A A = = = Currency -A - $ -% Alignment to Number --PV(15%/2,4*2,10%*1000/2,1000) . Conditional Format as Formatting Table - Styles Cell Styles Clipboard Font Cells D2 - X V fi C Q14 Price at start of Year 1 --PV(15%/2,5*2,10%*1000/2,1000) Price at end of Year 1 |--PV(15%/2,4*2,10%*1000/2,1000) Capital gain =(D2-D1)/D1 015 Price of bond --PV(15%/2,5*2,10%*1000/2, 1000) 16 17 Sheet1 Sheet2 Sheet3 Sheet4 © Ready E E 2 A EI 1 -- ENG 5:45 AM - + 100% O