Makes semiannual interest payments

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1. If a 10 year bond that pays interest annually has a par value of $1,000, coupon rate of 9.125%, rate of return of 8%, and a bond price of $1,080.31. If the PV Coupon is $651.43, what is the PV of the principle?

2. A bond that matures in 2 years makes semiannual interest payments. Its par value is $1,000, its coupon rate equals 4%, and the rate of return is 3%. What is the bond price?

3. Your opinion about the extent to which markets are efficient will have a significant impact on your choice re effective trading strategies. Briefly explain why and how this is true.

Reference no: EM131977006

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