Use the following table to compute the price of the four bonds: Face Value Maturity (years) Yield Frequency of yield Coupon rate Frequency of coupon Bond 1 £100 3 5% annual 6% annual Bond 2 £1000 4 3% quarterly 4% semi-annual Bond 3 £100 2 2% monthly 3% quarterly Bond 4 £100 5 3% monthly 4% semi-annual
Use the following table to compute the price of the four bonds: Face Value Maturity (years) Yield Frequency of yield Coupon rate Frequency of coupon Bond 1 £100 3 5% annual 6% annual Bond 2 £1000 4 3% quarterly 4% semi-annual Bond 3 £100 2 2% monthly 3% quarterly Bond 4 £100 5 3% monthly 4% semi-annual
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use the following table to compute the price of the four bonds:
|
Face Value |
Maturity (years) |
Yield |
Frequency of yield |
Coupon rate |
Frequency of coupon |
Bond 1 |
£100 |
3 |
5% |
annual |
6% |
annual |
Bond 2 |
£1000 |
4 |
3% |
quarterly |
4% |
semi-annual |
Bond 3 |
£100 |
2 |
2% |
monthly |
3% |
quarterly |
Bond 4 |
£100 |
5 |
3% |
monthly |
4% |
semi-annual |
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