Using the actual-actual method for figuring day counts

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Reference no: EM132036959

1) On April 30, 1990, April purchased a $1,000 10% par-value seven-year bond having semiannual coupons; these were payable at the end of each October as well as on the anniversaries of the purchase. April paid $1,120. On July 18, 1993, she wished to know the dirty and clean values of this bond, figured using the theoretical method and again by the practical method. Calculate them all for her, using the ”actual/actual” method for figuring day counts.

2) A five year $1,000 par-value bond has semiannual coupons of $60 on June 30 and on December 31 of each year. It is purchased for $986 on Dec. 31, 2015 (the first coupon payment will be June 30, 2016). Find the market price (called semi-practical clean price in our textbook) on August 28, 2018, using actual/actual to compute f.

3) A ten year $1,000 bond has a 10% coupon rate convertible semiannually. It is callable at any time after a two-year lockout period. An investor wishes to buy the bond to yield at least 8% convertible semiannually. What is the price which will yield at least 8% convertible semiannually?

4) A five year $1,000 bond has a 6% coupon rate convertible semiannually. It is callable in 2 years, in 3 years, and in 4 years. At what price should the investor buy the bond to get a yield of at least 6.2% convertible semiannually?

DO NOT use Excel. Please show all work. Use financial mathematic formulas.

Reference no: EM132036959

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