28 A B E F H M Question 4 (4 Marks) The JG Investment Bank is about to issue a new series of 10 year bonds. The bonds will have a $1000 face value and 4 will be rated AA by a respected Bond Rating Agency. 5 Currently, the yield to maturity on AA rated bonds is 6 260 basis points above the yield on similar maturity 7 government bonds. The bonds will make annual coupon payments. 8 a) If the YTM on 10 year government bonds is Enter Answer 2.6% what coupon rate should JG choose if it wants the bonds to sell at par? (1 Mark) 12 13 b) If JG issues 1,500 bonds, how much capital Enter Answer will they raise from the sale? (1 mark) + 10 11 14 15 16 c) 17 Enter Answer 18 1 Two years later, the YTM on 8 year gov't bonds has risen to 3.09. If the yield on AA rated bonds is still 260 basis points higher than a gov't bond, what is the new price of the bond? (note: round to the nearest cent) (1 mark) 19 Enter your Final Answer Here 20 21 22 a Premium Par a Discount 23 ) JG's bonds now sell at 24 (1 Mark) 25 90 Compies work in these how Title Page A Question 1 Question 2 } Check only ONE Box Question 3 Question 4 Question 5 Question 6 + ame Insert Draw Page Layout Formulas Data Review View Wrag Text ete Merge & Center A B D E G Question 6 (3 mark) Jeannie is saving up to make a down payment on a new car. She currently has $1,880 in a savings plan that pays interest at the end of every month with an interest rate of 3 compounded monthly; however, she needs at least $5000 for the down payment. If Jeannie can save $166 at the end of every month, then the number of months it will take 8 her to accumulate $5000 is... 9 Enter Answer 10 Enter your Final Answer Here 11 Complete your rough work of any in the space below 12 13 14 15 16 17 18 19 20 21 23 25 Title Page Question 1 Question 2 Question 3 Question Questions Question MacBook Air esc - F1 BO 000 DOO F3 F4