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Corporate finance-debt instruments

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Reference no: EM133068078

Subject: Corporate Finance - Debt Instruments

A zero coupon bond with a face value of 30,000 UF maturing on September 1, 2010 is traded in the market at a rate of UF + 3% per annum. If the investment is made on 05-Sep-2006 and the value of the UF on that day is $18,350.79, answer:

a) How much would you pay for the bond?

b) How many UF do you earn in interest?

c) What happens if you sell the bond in 60 days at an interest rate of UF + 2.5% per annum?

d) What is the monthly yield of the operation in c)?

Reference no: EM133068078

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