Reference no: EM133072907

1. Parey Bond is discounted by Php 64,520, its selling price is Php 735,480. Statement 1: Parey Bond's par value is Php 800,000. Statement 2: Investors are more willing to buy the bond.

2. Volavon Bond has been called by Volavon Inc. Statement 1: Volavon Bond may be undergoing a refunding operation. Statement 2: The prevailing market interest rate is higher than the coupon interest rate. Statement 3: Investors were paid with premium.

3. The ordinary dividend of Agila Stocks is expected to grow at an 8% rate for three years. A constant growth of 3% will continue for the succeeding years. Agila Stocks gives Php 5.00 per share at the present. Compute for the present value of the dividend during the first 3 years. *

PV @ 8% for 3years PV @ 3% for 3years PV @ 5% for 3years

0.926 0.971 0.952

0.857 0.943 0.907

0.794 0.915 0.864

4. James' bond sells at Php 1,083,452.78, its par value is Php 1,000,000. Statement 1: The prevailing market interest rate is lower than the coupon interest rate. Statement 2: Investors are less willing to buy James' bond.

5. The exchange rate yesterday was 1 peso = 0.02 dollar, the exchange rate today is 1 peso = 0.018 dollar. Statement 1: Peso appreciated against dollars. Statement 2: More units of peso are needed to buy units of dollar.

6. The forward rate is 1 peso = 0.022 dollar, the spot rate at the date of the delivery of forward contract is 1 peso = 0.02 dollar. Statement 1: If there was no forward contract, an exporter would have received greater units of peso from their dollar transaction resulting to a gain. Statement 2: If there was no forward contract, an importer would have paid greater units of peso from their dollar transaction resulting to a loss.