3. A bond with a face value of $1,800 pays half-yearly interest at a rate of 6% pa compounded half-yearly and has 7 years until maturity. The next interest payment is due in exactly one half-year. Calculate the price (P) required to yield 4% pa compounded half-yearly. Give your answer in dollars and cents to the nearest cent. P = $ 4. Calculate the purchase price of the following bonds. Indicate whether the bonds are priced at a discount, at par or at a premium. Give your answers in dollars and cents to the nearest cent. Face Value Coupon Rate Years to Maturity Market Rate a) $100 r = 10.75% 4 j2 = 12.5% b) $1,000 r = 7% 11 j2 = 7% c) $10,000 r = 6.75% 21 j2 = 5% Quoted coupon rates and market rates are nominal annual rates compounded semi-annually. a)Price = $ This bond is priced at: a discount par a premium b)Price = $ This bond is priced at: a discount par a premium c)Price = $ This bond is priced at: a discount par a premium 5. Biti Bank purchase a $4,000 bond that pays 9% pa compounded half-yearly and is redeemable in exactly 10 years. The price paid will yield the bank 5% pa compounded half-yearly if held to maturity. Biti Bank hold this bond for 6 years before coming to a decision that the bond should be sold. They decide to sell to ZNZ Bank at 4.4% pa compounded half-yearly. a)Calculate the price (PB) that Biti Bank paid to purchase the bond. Give your answer in dollars and cents to the nearest cent. PB = $ b)Calculate the price (PZ) that ZNZ Bank paid to purchase the bond. Give your answer in dollars and cents to the nearest cent. PZ = $ c)Calculate the nominal annual yield compounded half-yearly that Biti Bank realised. You may give your answer as a percentage per annum to the nearest percent or use linear interpolation or a financial calculator to give a more accurate result. Yield = % pa 6.You are thinking about investing in Suzie's Super Speakers. You notice the following newspaper article about the business: When asked about the future of her successful company, Suzie highlighted that her company had paid dividends of $0.70 last year, and are due to pay dividends again today. Suzie is excited because today's dividends will be 4.3% higher than last year's. Suzie has spent years slowly raising her dividends to this level but now expects to maintain dividends at today's level for the life of her business. Suzie's Super Speakers currently return 12.1% pa to shareholders. Based on this information, calculate the share price (P) for Suzie's Super Speakers immediately after today's dividends are paid. Give your answer in dollars and cents to the nearest cent. P = $