Page 2 of 6 Problem 2i A certain U.S. Treasury bond that matures in 15 years has a $10,000 face value. This means that the bondholder will receive $10,000.00 cash when the bond's maturity date is reached. The bond pays an annual nominal interest of 8% of its face value in semi-annual installments starting at the end of the 1't semi-annual period. a) Draw a cash flow diagram showing bond payments. b) Wha t is its present worth, PW, if the prevailing interest rates are 10% per year compounded quarterly? If the bond still pays the 8% annual nominal interest rate but in 4 equal installments per year. starting at the end of the 1st quarter period, c) Draw a new cash flow diagram showing the bond payments d) What is the effective quarterly interest rate, assuming the prevailing interest rates are 10% per year compounded monthly? What is the present worth of the bond at the end of the fifth year? e) Page 2 of 6 Problem 2i A certain U.S. Treasury bond that matures in 15 years has a $10,000 face value. This means that the bondholder will receive $10,000.00 cash when the bond's maturity date is reached. The bond pays an annual nominal interest of 8% of its face value in semi-annual installments starting at the end of the 1't semi-annual period. a) Draw a cash flow diagram showing bond payments. b) Wha t is its present worth, PW, if the prevailing interest rates are 10% per year compounded quarterly? If the bond still pays the 8% annual nominal interest rate but in 4 equal installments per year. starting at the end of the 1st quarter period, c) Draw a new cash flow diagram showing the bond payments d) What is the effective quarterly interest rate, assuming the prevailing interest rates are 10% per year compounded monthly? What is the present worth of the bond at the end of the fifth year? e)