A $50 000, 4% bond with semi-annual coupons is purchased three years before maturity. Calculate the discount or premium if the bond is sold to yield 6% compounded semi-annually. 31) A $125 000 bond, redeemable at par in three years with 7.5% coupons payable quarterly, is bought to yield 6% compounded quarterly. (i) Compute the premium or discount and the purchase price. (ii) Construct a schedule for amortization of premium.
A $50 000, 4% bond with semi-annual coupons is purchased three years before maturity. Calculate the discount or premium if the bond is sold to yield 6% compounded semi-annually. 31) A $125 000 bond, redeemable at par in three years with 7.5% coupons payable quarterly, is bought to yield 6% compounded quarterly. (i) Compute the premium or discount and the purchase price. (ii) Construct a schedule for amortization of premium.
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 $50 000, 4% bond with semi-annual coupons is purchased three years before maturity. Calculate the discount or premium if the bond is sold to yield 6% compounded semi-annually.
31) A $125 000 bond, redeemable at par in three years with 7.5% coupons payable quarterly, is bought to yield 6% compounded quarterly.
(i) Compute the premium or discount and the purchase price.
(ii) Construct a schedule for amortization of premium.
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