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a . Find the price of a 7 % coupon bond, paying its coupon semi - annually, with 1 8 months left to maturity. The

a. Find the price of a 7% coupon bond, paying its coupon semi-annually, with
18 months left to maturity. The bond has a yield of 8% compounded semi-annually.
Assume the Face Value of the bond to be $100.
b. Find the price of the same bond (described in part a), with 6 months left to
maturity.
c. What do you notice? What can you conclude?
d. Find the price of a 0% coupon bond, with 10 years left to maturity. The bond
has a yield of 6% compounded semi-annually. Assume the Face Value of the
bond to be $100.
e. Find the yield of a 6% coupon bond, paying its coupon semi-annually, with 24
months left to maturity. The price of the bond is $1,030.5. Assume the Face
value of the bond to be $1,000.
f. Every month you deposit $150 in your investments account. Your account
pays 5% in interest annually, compounded monthly. What amount are you
left with after 10 years?
g. You are saving for a $50,000 vehicle that you would like to purchase in 5
years. Your account pays 6% annually, compounded annually. If you do not
plan on contributing additional funds to your account over the years, how
much should you deposit in your account at initiation?
h. You are shopping for a loan. The advertised Nominal Interest rate is 5%. You
find out that the interest will be compounded quarterly. Find the Effective
Annual Interest rate.

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