Question 1: Two $900 par value bonds are bought to be redeemed at the end of the same period and to yield an annuall nominal rate of 5% convertible semi-annually. The price of the first bond is $1027.63 and has a coupon rates of 6%. The second bond has a coupon rate of 3%. What is the price of the second bond? A) 644.74 B) 859.65. C) 429.83 D) 967.11 E) 322.37
Question 1: Two $900 par value bonds are bought to be redeemed at the end of the same period and to yield an annuall nominal rate of 5% convertible semi-annually. The price of the first bond is $1027.63 and has a coupon rates of 6%. The second bond has a coupon rate of 3%. What is the price of the second bond? A) 644.74 B) 859.65. C) 429.83 D) 967.11 E) 322.37
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:Question 1:
Two $900 par value bonds are bought to be redeemed at the end of the same period and to yield an annual
nominal rate of 5% convertible semi-annually. The price of the first bond is $1027.63 and has a coupon rate
of 6%. The second bond has a coupon rate of 3%. What is the price of the second bond?
A) 644.74
B) 859.65
C) 429.83
D) 967.11
E) 322.37
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