Which of the following equations is equal to the intrinsic value of a 14 % coupon rate 3 years maturity bond whose face value will be paid at the end of the maturity. a) [140 / 1,13 ] + [140/ (1,13)(1,14)] + [1140/ (1,13)(1.14)(1,145)] b) [140/ (1,13)] + [140 / (1,13)² ] + [1140 / (1,13)] c) [PVAF for 13 % n= 3]( 140 ) +1000/ (1,13 ) d) [ PVAF for [ ( 0,13+0,14+0,145 ) /3 ] + 1000/ (1,13 )
Which of the following equations is equal to the intrinsic value of a 14 % coupon rate 3 years maturity bond whose face value will be paid at the end of the maturity. a) [140 / 1,13 ] + [140/ (1,13)(1,14)] + [1140/ (1,13)(1.14)(1,145)] b) [140/ (1,13)] + [140 / (1,13)² ] + [1140 / (1,13)] c) [PVAF for 13 % n= 3]( 140 ) +1000/ (1,13 ) d) [ PVAF for [ ( 0,13+0,14+0,145 ) /3 ] + 1000/ (1,13 )
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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![Which of the following equations is equal to the intrinsic value of a 14 % coupon
rate ,3 years maturity bond whose face value will be paid at the end of the maturity.
a) [140 / 1,13] + [140/ (1,13)(1,14)] + [1140/ (1,13)(1.14)(1.145)]
b) [140/ (1,13)] + [140 / (1,13)? ] + [1140 / (1,13)]
c) [PVAF for 13 % n= 3]( 140) +1000/ (1,13 )
d) [ PVAF for [ ( 0,13+0, 14+0,145 ) /3 ] + 1000/ (1,13 )](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc8efd5d3-d76d-40cb-b3ae-6148da5779b6%2F5aaceeff-59c3-465d-989f-985bb12bbd83%2Fitk7sts_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Which of the following equations is equal to the intrinsic value of a 14 % coupon
rate ,3 years maturity bond whose face value will be paid at the end of the maturity.
a) [140 / 1,13] + [140/ (1,13)(1,14)] + [1140/ (1,13)(1.14)(1.145)]
b) [140/ (1,13)] + [140 / (1,13)? ] + [1140 / (1,13)]
c) [PVAF for 13 % n= 3]( 140) +1000/ (1,13 )
d) [ PVAF for [ ( 0,13+0, 14+0,145 ) /3 ] + 1000/ (1,13 )
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