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1. A 25 year annual coupon bond with face and redemption amount of 2000 is selling at an effective annual yield rate equal to twice
1. A 25 year annual coupon bond with face and redemption amount of 2000 is selling at an effective annual yield rate equal to twice of the annual coupon rate. The present value of the redemption amount is equal to the present value of the coupons. (a) Determine the purchase price of the bond at issuance. (b) Determine the amount for amortization of premium (or the principal repaid) in the 20th coupon. (C) Suppose the bond was issued January 15, 2010, and is bought by a new purchaser on January 15, 2020 immediately after the coupon payment for a price of 1500. Find the internal rate of return earned by the original bondholder. 1. A 25 year annual coupon bond with face and redemption amount of 2000 is selling at an effective annual yield rate equal to twice of the annual coupon rate. The present value of the redemption amount is equal to the present value of the coupons. (a) Determine the purchase price of the bond at issuance. (b) Determine the amount for amortization of premium (or the principal repaid) in the 20th coupon. (C) Suppose the bond was issued January 15, 2010, and is bought by a new purchaser on January 15, 2020 immediately after the coupon payment for a price of 1500. Find the internal rate of return earned by the original bondholder
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