Iolanda purchased a Treasury bond with a coupon rate of 4.08% p.a., compounded half-yearly, and face value of $100. The maturity date of the bond is 15 April 2029. a) Luciana plans to purchase Iolanda's Treasury bond on 11 April 2018. What price will Luciana pay (rounded to four decimal places)? Assume a yield of 4.72% p.a., payable half-yearly. a. 94.6997 b. 94.5572 c. 94.5088 d. 94.5068 (b) In fact, Luciana purchased Iolanda's bond on 9 February 2018. What was Luciana's purchase price (rounded to four decimal places)? Assume a yield of 4.72% p.a., payable half-yearly. a. 95.7915 b. 95.9769 c. 95.7959 d. 93.7728
Iolanda purchased a Treasury bond with a coupon rate of 4.08% p.a., compounded half-yearly, and face value of $100. The maturity date of the bond is 15 April 2029. a) Luciana plans to purchase Iolanda's Treasury bond on 11 April 2018. What price will Luciana pay (rounded to four decimal places)? Assume a yield of 4.72% p.a., payable half-yearly. a. 94.6997 b. 94.5572 c. 94.5088 d. 94.5068 (b) In fact, Luciana purchased Iolanda's bond on 9 February 2018. What was Luciana's purchase price (rounded to four decimal places)? Assume a yield of 4.72% p.a., payable half-yearly. a. 95.7915 b. 95.9769 c. 95.7959 d. 93.7728
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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Iolanda purchased a Treasury bond with a coupon rate of 4.08% p.a., compounded half-yearly, and face value of $100. The maturity date of the bond is 15 April 2029.
a) Luciana plans to purchase Iolanda's Treasury bond on 11 April 2018. What price will Luciana pay (rounded to four decimal places)? Assume a yield of 4.72% p.a., payable half-yearly.
a. 94.6997 b. 94.5572 c. 94.5088 d. 94.5068
(b) In fact, Luciana purchased Iolanda's bond on 9 February 2018. What was Luciana's purchase price (rounded to four decimal places)? Assume a yield of 4.72% p.a., payable half-yearly.
a. 95.7915 b. 95.9769 c. 95.7959 d. 93.7728
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VIEWStep 2: Calculation showing the price of treasury bond:
VIEWStep 3: Calculation of coupon amount and YTM every year and present value:
VIEWStep 4: Days between the prior coupon payment date & settlement date & between two coupon payment dates:
VIEWStep 5: Calculation of purchase price of the bond:
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