following problems. Use the back pages for your answers. 1) Suppose the investor's rate is 9% in the P50,000, 7.5% bond with coupons paid semi-annually. The bond is redeemable on July 1, 2006 and is now bought on July 1, 1999. Find the price of the bond if (a) the bond is redeemable at par; (b) the bond is redeemable at 110%. (c) the discount if possible. 2) A P50,000, 7.5% bond that pays coupons semi-annually will be redeemed only on July 1, 2006. Find the price if bought on July 1, 1999 if the investor's rate is 6% at the end of 2 years if (a) the bond is redeemable at par; (b) the bond is redeemable at 110%. 3) Christine wants to buy a P2,000 bonds which are redeemable at par on March 23, 2020 and pays bond interest annually at 5%. It is callable on March 23, 2010 at P2,500. Find the maximum price on March 23, 1995 if it is yield at least 4% effective on the investment.
following problems. Use the back pages for your answers. 1) Suppose the investor's rate is 9% in the P50,000, 7.5% bond with coupons paid semi-annually. The bond is redeemable on July 1, 2006 and is now bought on July 1, 1999. Find the price of the bond if (a) the bond is redeemable at par; (b) the bond is redeemable at 110%. (c) the discount if possible. 2) A P50,000, 7.5% bond that pays coupons semi-annually will be redeemed only on July 1, 2006. Find the price if bought on July 1, 1999 if the investor's rate is 6% at the end of 2 years if (a) the bond is redeemable at par; (b) the bond is redeemable at 110%. 3) Christine wants to buy a P2,000 bonds which are redeemable at par on March 23, 2020 and pays bond interest annually at 5%. It is callable on March 23, 2010 at P2,500. Find the maximum price on March 23, 1995 if it is yield at least 4% effective on the investment.
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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Transcribed Image Text:Solve the following problems. Use the back pages for your answers.
1) Suppose the investor's rate is 9% in the P50,000, 7.5% bond with coupons paid semi-annually. The
bond is redeemable on July 1, 2006 and is now bought on July 1, 1999. Find the price of the bond if (a)
the bond is redeemable at par; (b) the bond is redeemable at 110%. (c) the discount if possible.
2) A P50,000, 7.5% bond that pays coupons semi-annually will be redeemed only on July 1, 2006. Find
the price if bought on July 1, 1999 if the investor's rate is 6% at the end of 2 years if (a) the bond is
redeemable at par; (b) the bond is redeemable at 110%.
3) Christine wants to buy a P2,000 bonds which are redeemable at par on March 23, 2020 and pays bond
interest annually at 5%. It is callable on March 23, 2010 at P2,500. Find the maximum price on March
23, 1995 if it is yield at least 4% effective on the investment.
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