1.Identify whether each of the following bonds is trading at a discount, at par value,or at a premium. Calculate the prices of the bonds per 100 in par value. If the couponrate is deficient or excessive compared with the market discount rate, calculate the amount of the deficiency or excess per 100 of par value. Bond Coupon Payment per Period Number of Periods to Maturity Market Discount Rate per period A 2 6 3% B 6 4 4% C 5 5 5% D 0 10 2%
1.Identify whether each of the following bonds is trading at a discount, at par value,or at a premium. Calculate the prices of the bonds per 100 in par value. If the couponrate is deficient or excessive compared with the market discount rate, calculate the amount of the deficiency or excess per 100 of par value. Bond Coupon Payment per Period Number of Periods to Maturity Market Discount Rate per period A 2 6 3% B 6 4 4% C 5 5 5% D 0 10 2%
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 11MC
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1.Identify whether each of the following bonds is trading at a discount, at par value,or at a premium. Calculate the prices of the bonds per 100 in par value. If the couponrate is deficient or excessive compared with the market discount rate, calculate the amount of the deficiency or excess per 100 of par value.
Bond | Coupon Payment per Period | Number of Periods to Maturity | Market Discount Rate per period |
A | 2 | 6 | 3% |
B | 6 | 4 | 4% |
C | 5 | 5 | 5% |
D | 0 | 10 | 2% |
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