What is the price of a three year bond

Reference no: EM131365373

1. Calculate the Net present value of the following cash flows at 7% p.a.:-

Time (years)	Cash Flow
0	-250,000
1	100,000
2	120,000
3	130,000

2. What is the price of a three year bond with a coupon of 5% when yields (interest rates) are 3%?

3. You hold a four year bond with a price of 97.6% and a coupon of 4%. What is the Yield to Maturity of the bond?

4. What is the EAR if you have a credit card that charges 11% per annum with monthly compounding?

5. You have a four year bond with a coupon of 8% and interest rates are 9%. Show how the gross redemption proceeds can be made immune from a 1% shift in interest rates with calculations to demonstrate what you have stated.

6. How useful are financial statements in planning your company's future financial needs? When are they a good starting point and when are they less useful?

Attachment:- Assignment.rar

Reference no: EM131365373

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