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1. Sea Masters Co. issued $1000 par value bonds with a 9 percent coupon. The bond pays interest semi-annually and has 6 years remaining to its maturity date. If the market demands 7.7 percent required rate on the bond, what is the price of the bond? Round it two decimal places.
2. Suppose you have just bought a 10-year, 6% semiannual coupon bond with $1,000 par value. Your purchasing price of the bond implies that the current YTM is 7%. Select all that are true.
a) your purchasing price would have been lower than the par value
b) you would earn 6% rate of return if you hold this bond until the maturity
c) you will receive a $30 coupon payment every six months
d) the coupon rate will gradually increase until it becomes the same as the YTM
e) the cash flows associated with the bond are an ordinary annuity for the annual 10 year period with $1,000 lump sum at the maturity.
your mother invested $4,000. Today, that investment is worth $109,099.26. What is the average annual rate of return she earned on this investment?
Leann just sold a $10,000 par value bond for $9,800. The bond interest rate was 7% per year payable quarterly. Leann owned the bond for 3 years.
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The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?
Researchers associated with South Miami Hospital (SMH) developed a new experimental laser treatment for heart patients. Its development team and the physicians who use the laser consider it to be a lifesaving advance. Is it ethical for the patient to..
A T-bill with face value $10,000 and 89 days to maturity is selling at a bank discount ask yield of 3.6%. a. What is the price of the bill? What is its bond equivalent yield? What is the price of the bill?
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what is the 1 year foward rate expected on treasury bills during year 3, 3f1?
Landon Stevens is evaluating the expected performance of two common stocks, Furhman Labs, Inc., and Garten Testing, Inc.
An investment project costs $20291 and has annual cash flows of $6533 for six years. What is the discounted payback period if the discount rate is zero percent?
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