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Table below is information about three USD10000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 14%. Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value. Bond Coupon Rate (%) Maturity (years)       1 8 5 2 14 10 3 16 15   B. Using the Interpolation Method to calculate the YTM for the below Bonds: > The par value USD18000 > Coupon Rate 10% every year > Maturity period 10 years > Market Value of bond USD21800

Table below is information about three USD10000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 14%. Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value. Bond Coupon Rate (%) Maturity (years)       1 8 5 2 14 10 3 16 15   B. Using the Interpolation Method to calculate the YTM for the below Bonds: > The par value USD18000 > Coupon Rate 10% every year > Maturity period 10 years > Market Value of bond USD21800

Essentials Of Investments
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
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A. Table below is information about three USD10000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 14%.

Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value.

Bond

Coupon Rate (%)

Maturity (years)

 

 

 

1

8

5

2

14

10

3

16

15

 

B. Using the Interpolation Method to calculate the YTM for the below Bonds:

> The par value USD18000

> Coupon Rate 10% every year

> Maturity period 10 years

> Market Value of bond USD21800

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Using the Interpolation Method to calculate the YTM for the below Bonds:

> The par value USD18000

> Coupon Rate 10% every year

> Maturity period 10 years

> Market Value of bond USD21800

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explain the calculation to find value of the bonds

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