Describe international bonds-equity trust certificates

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1. Define and describe international bonds. Equity trust certificates.

2. If we buy stock worth $1 million and initial margin requirements are 50% while maintenance are 305. Explain what happens.

3. We have a 12%, 15 year bond, which sells for $900. If the firm has the right to call it back after 6 years at par plus half a year’s coupon. Compute the YTM and the YTC. Which will the investor attain?

4. There is a 6% yield preferred stock which is callable at 104 after 2 years. Its dividend is $4 per annum. If the firm does not buy the asset, it loses its right to call it back at the 5th year. Derive the price of the preferred stock in the 2 cases where it is callable and in 5 years when it becomes non callable.

5. We buy a 20 , 7% bond when rates are 10% and sell it when they are 6% in 6 years. What is the price we sell it at and buy it at?.

Reference no: EM131835209

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