Question
An investment firm makes a special deal with you. If your birthday is between March 1st and August 31st, you will receive a two-year $1,100
An investment firm makes a special deal with you. If your birthday is between March 1st and August 31st, you will receive a two-year $1,100 bond (5% annual coupon rate) with quarterly coupons. Alternatively, if your birthday is in a different month, you will receive a three-year $900 bond (9% annual coupon rate) with quarterly coupons. Additionally, the discount rates used will be based on birthdates. For EVEN birthdates, the discount rate is 2% per quarter. For ODD birthdates, the discount rate is 1.75% per quarter. As an example, a birthday of June 15th will get a $1,100 bond and a discount rate of 1.75% per quarter. Based on your birthday (will be verified), calculate the present value of your investment (include a diagram). Again, write down the SAME birthdate as you have given previously or you will NOT get full marks! Birthdate: 2 march 1999
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