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A $1,000 par value 10-year bond with annual coupons is redeemable at $1,055, and has a purchase price of $986 at a yield rate
A $1,000 par value 10-year bond with annual coupons is redeemable at $1,055, and has a purchase price of $986 at a yield rate of 4% per annum. The coupons are non-level and increase by $2 per year. (a) Find the amount of the first coupon payment. Round your answer to the nearest 0.01. (b) Using a spreadsheet software, construct a bond amortization schedule for all the years. You may use your own spreadsheet template. (e) Suppose that the issue date for this bond was on June 15, 2015 with maturity date June 15, 2025. Assume that the coupon dates are June 15 of each year. On July 18, 2019, an investor purchased the bond to yield 3.8% annually. Find the purchase price, accrued interest and the quoted price of the bond at the date of purchase. Use the actual/actual method. (Note: you may use a software to check your answers. However, please show your written working for this question.)
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