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10 ed out of question Questions 5-11 will be based on the following information. The supervisor of the Treasury Department of Nitram Computers Ltd has

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10 ed out of question Questions 5-11 will be based on the following information. The supervisor of the Treasury Department of Nitram Computers Ltd has welcomed your analysis of Bonds A to D, and has given you another fixed-income security portfolio to analyse. The following information relates to these securities. Bond E- These bonds pay annual coupons at a fixed coupon rate of 3.8% p.a., and have 2 years to maturity. Bond F-These bonds pay annual coupons at a fixed coupon rate of 6.9% p.a., and have 3 years to maturity. Bond G-These bonds pay semi-annual coupons, on the 15th day of March and September each year, at a fixed coupon rate of 5.2% p.a., and have 3 years to maturity. Bond H- These bonds pay quarterly coupons at a fixed coupon rate of 8.4% p.a., and have 6 years to maturity. Promissory Note J- These notes were issued 115 days ago. When they were first issued they were issued as 180-day notes. . All of these securities have a face value of $1000. Shown below are the current spot rates for 1, 2 and 3-year zero-coupon bonds with the same risk as bonds issues by Nitram. Year Spot Rate 1 2.4% 2 3.2% 3 3.7% At what price will the promissory notes be trading if they are quoted on an add-on basis at a yield of 5.6% a. $993.13 $990.03 c. $988.03 d. $990.13 10 ed out of question Questions 5-11 will be based on the following information. The supervisor of the Treasury Department of Nitram Computers Ltd has welcomed your analysis of Bonds A to D, and has given you another fixed-income security portfolio to analyse. The following information relates to these securities. Bond E- These bonds pay annual coupons at a fixed coupon rate of 3.8% p.a., and have 2 years to maturity. Bond F-These bonds pay annual coupons at a fixed coupon rate of 6.9% p.a., and have 3 years to maturity. Bond G-These bonds pay semi-annual coupons, on the 15th day of March and September each year, at a fixed coupon rate of 5.2% p.a., and have 3 years to maturity. Bond H- These bonds pay quarterly coupons at a fixed coupon rate of 8.4% p.a., and have 6 years to maturity. Promissory Note J- These notes were issued 115 days ago. When they were first issued they were issued as 180-day notes. . All of these securities have a face value of $1000. Shown below are the current spot rates for 1, 2 and 3-year zero-coupon bonds with the same risk as bonds issues by Nitram. Year Spot Rate 1 2.4% 2 3.2% 3 3.7% At what price will the promissory notes be trading if they are quoted on an add-on basis at a yield of 5.6% a. $993.13 $990.03 c. $988.03 d. $990.13

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