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15. Homer must pay 1,000 in 6 months from now and another 1,000 in a year from now. There are two investments available: (a) A
15. Homer must pay 1,000 in 6 months from now and another 1,000 in a year from now. There are two investments available: (a) A bond maturing in 6 months, F = 1,000, a nominal annual coupon rate convertible every six months of 4%, and a nominal annual yield rate convertible every six months of 3%. (b) A bond maturing in 1 year, F = 1,000, a nominal annual coupon rate convertible every six months of 5%, and a nominal annual yield rate convertible every six months of 6%. Find the amount of each bond to buy and the total cost of the bonds. 15. Homer must pay 1,000 in 6 months from now and another 1,000 in a year from now. There are two investments available: (a) A bond maturing in 6 months, F = 1,000, a nominal annual coupon rate convertible every six months of 4%, and a nominal annual yield rate convertible every six months of 3%. (b) A bond maturing in 1 year, F = 1,000, a nominal annual coupon rate convertible every six months of 5%, and a nominal annual yield rate convertible every six months of 6%. Find the amount of each bond to buy and the total cost of the bonds
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