AULOSOVE Align Layout References Mailings Review View Help File Home Insert Draw Design X Times New Roman 12 I BIU.ab X, XA A-D A Aa A A Clipboard Font ES E - 1. AL Styles Editing Dictate Sensitivity Share Upload Paragraph Styles B Voice Sensitivity Box 2. A 20 year 10,000 par value bond has an 7% coupon rate payable semi-annually. It is callable beginning with the coupon payment at the end of year 12 through the end of year 16 with a 9% call premium. Beginning with the first coupon payment in year 17, it is callable at par until maturity. An investor buys the bond to yield a minimum of 5% convertible semi-annually. CD Find the purchase price of the bond. IS 20 7. An annual coupon bond has 2 years remaining until maturity. The bond has a 10% expected default rate on each coupon date, as long as the default has not yet occurred. If a default occurs, the bond will not make any more coupon payments, but will pay 70% of the face amount from the sale of bond collateral. The bond has a coupon rate of 8%, and a face amount of 100,000. a. Find the price of the bond using expected present values, assuming a desired annual yield of 6%. Times New Roman 12 BIU - ab x, x' A SE Paste Styles Editing Dictate Sensitivity Share Upload APA Aa A A A Clipboard Font Paragraph 5 Styles Sensitivity Box 5. Samantha buys a 12-year annuity immediate with semi-annual payments for a price X. Payments start at 5000, and decrease 500 per payment until they reach 2000, then remain level at that amount for the remainder of the term. The nominal annual interest rate compounded quarterly is 8%. Voice Find X