A company issued $200 bonds that mature at par on July 1, 2019, with interest of 9.5% per annum payable on the first day of the months of January, April, July, and October of each year, that is, each quarter. How much must be paid for each bond on October 1, 2014, if returns of 16% per year compounded quarterly are intended? How much are the profits for the investor who buys them?
A company issued $200 bonds that mature at par on July 1, 2019, with interest of 9.5% per annum payable on the first day of the months of January, April, July, and October of each year, that is, each quarter. How much must be paid for each bond on October 1, 2014, if returns of 16% per year compounded quarterly are intended? How much are the profits for the investor who buys them?
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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A company issued $200 bonds that mature at par on July 1, 2019, with interest of 9.5% per annum payable on the first day of the months of January, April, July, and October of each year, that is, each quarter. How much must be paid for each bond on October 1, 2014, if returns of 16% per year compounded quarterly are intended? How much are the profits for the investor who buys them?
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