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Exercise 6. [7] We consider a 1000 par value 10-year bond with semi-annual coupon and redeemable at 1200. We suppose that: The yield rate
Exercise 6. [7] We consider a 1000 par value 10-year bond with semi-annual coupon and redeemable at 1200. We suppose that: The yield rate is 8% convertible quarterly The first coupon is 10 and each subsequent coupon is greater by 2 than the previous one. 1) Find the price of the bond. 2) Find the book value of this bond after payment of the 12th coupon. 3) Find the book price of this bond before payment of the 13th coupon. 4) Find the book value of this bond after payment of the 13th coupon. 5) Find the amount of interest and principle in the coupon of the 7th year.
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