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Determine the yield rate j, using the method of averages. Face Value Redemption at Bond Interest Years to Redemption Purchase Price 5000 101 ji = 11.5% 4 4800

Determine the yield rate j, using the method of averages. Face Value Redemption at Bond Interest Years to Redemption Purchase Price 5000 101 ji = 11.5% 4 4800

Essentials Of Investments
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
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Previous Problem Problem List Next Problem Determine the yield rate ji using the method of averages. Face Value Redemption at Bond Interest Years to Redemption Purchase Price 5000 101 j = 11.5% 4 4800 Answer: %
Transcribed Image Text:Previous Problem Problem List Next Problem Determine the yield rate ji using the method of averages. Face Value Redemption at Bond Interest Years to Redemption Purchase Price 5000 101 j = 11.5% 4 4800 Answer: %
Determine the yield rate j2 using linear interpolation, by first finding an approximate yield using method of averages and then using the next lowest and highest whole percent in linear interpolation. (i.e. if using method of averages you find j2 = 5.27%, then use j2 = 5% and j2 = 6% for linear interpolation) Face Value Redemption at Bond Interest Years to Redemption Purchase Price 7000 102 j2 = 9.5% 10 7700 Answer: %
Transcribed Image Text:Determine the yield rate j2 using linear interpolation, by first finding an approximate yield using method of averages and then using the next lowest and highest whole percent in linear interpolation. (i.e. if using method of averages you find j2 = 5.27%, then use j2 = 5% and j2 = 6% for linear interpolation) Face Value Redemption at Bond Interest Years to Redemption Purchase Price 7000 102 j2 = 9.5% 10 7700 Answer: %
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