1.Identify whether each of the following bonds is trading at a discount, at par value,or at a premium. Calculate the prices of the bonds per 100 in par value. If the couponrate is deficient or excessive compared with the market discount rate, calculate the amount of the deficiency or excess per 100 of par value. Bond Coupon Payment per Period Number of Periods to Maturity Market Discount Rate per period A 2 6 3% B 6 4 4% C 5 5 5% D 0 10 2%
1.Identify whether each of the following bonds is trading at a discount, at par value,or at a premium. Calculate the prices of the bonds per 100 in par value. If the couponrate is deficient or excessive compared with the market discount rate, calculate the amount of the deficiency or excess per 100 of par value. Bond Coupon Payment per Period Number of Periods to Maturity Market Discount Rate per period A 2 6 3% B 6 4 4% C 5 5 5% D 0 10 2%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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1.Identify whether each of the following bonds is trading at a discount, at par value,or at a premium. Calculate the prices of the bonds per 100 in par value. If the couponrate is deficient or excessive compared with the market discount rate, calculate the amount of the deficiency or excess per 100 of par value.
| Bond | Coupon Payment per Period | Number of Periods to Maturity | Market Discount Rate per period |
| A | 2 | 6 | 3% |
| B | 6 | 4 | 4% |
| C | 5 | 5 | 5% |
| D | 0 | 10 | 2% |
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