Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(Fast please )On January 26, 2020, Omar issued a bond with NIS 100 par value. The bond bears interest at the rate of 10% annually

(Fast please )On January 26, 2020, Omar issued a bond with NIS 100 par value.
The bond bears interest at the rate of 10% annually paid at the end of each median.
The life of the bond (7 + 7) years and its par value will be repaid in one payment at the end of the period.
It is known that the annual yield required for redemption in this bond is 16.64%
On the same day, Tamar also issued a bond with NIS 400 par value.
The bond bears a fixed interest rate (coupon) at a rate of 10% + 7% (ie - ten percent plus the fourth digit in your ID number in percent, for example if the fourth digit is 2 the annual interest rate will be 12%.) Annual and paid once a year.
The lifespan of the bond is 4 years.
The face value of the bond will be repaid in four identical installments (at the end of each year it will be repaid a quarter of the face value)
It is known that the required yield to maturity in this bond is 16.5% per annum.
Required:
A. (9 basis points) Calculate the price of 2 bonds on the day of issue
B. (6 points) What was the type of issue of each of them (premium / parry / discount), explanation and reasoning
third. (6 points) Natalie, their good friend, also issued a (infinite) bond on the same day, it is known that both the required annual rate of return on Natalie's bonds and the price of the bonds on the day of issue are exactly the same as those of the bonds Of Tamar. Calculate the amount of the annual payment (coupon) paid on Natalie's bonds.
D. (7 points) Calculate the MMM of the fee issued by Tamar

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions