Question
CBA arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000. City Investments buy the bill
CBA arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000. City Investments buy the bill when it is first issued at a yield of 3.25% pa and sell it 30 days later to Prudential Investments at a yield of 3.65% pa. What price does City Investments sell the bill for?
| a. | $500,000.00 | |
| b. | $497,342.96 | |
| c. | $498,504.49 | |
| d. | $482,392.67 | |
| e. | $497,017.89 |
What would you pay for a bond that pays an annual coupon of $45, has a face value of $1,000, matures in 11 years, and has a yield to maturity of 10%?
| a. | $1,107.41 | |
| b. | $958.47 | |
| c. | $1,000.00 | |
| d. | $642.77 | |
| e. | $693.77 |
What is the market value of a bond that will pay a total of fifty semi-annual coupons of $50 each over the remainder of its life? Assume the bond has a $1,000 face value and a 12% yield to maturity.
| a. | $1,000.00 | |
| b. | $1,214.82 | |
| c. | $418.69 | |
| d. | $842.38 | |
| e. | $833.91 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing Principles
Authors: Howard F. Stettler
3rd Edition
0130521183, 9780130521187
