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Please help me for my homework! Be careful when solving problems. I really need the right answers 1- Suppose that at the beginning of the
Please help me for my homework! Be careful when solving problems. I really need the right answers
1- Suppose that at the beginning of the year, you invest in a bond that has a face value of 80.000 $, a maturity of 3 years, a coupon rate of 20% and annual coupon payments. Market yields were 15%, however, they have risen to 25% at the end of the second year. What would be the dirty price of the bond at the end of the third year? a) 76.800 $ b) 96.000 $ c) 102.500 $ d) 80.000 $ 2- Suppose that you obtain a loan from a bank. The loan amount is 60.000 $ and has a 5 years maturity. You have to pay monthly installments and the annual interest rate is determined as 20%. Then, you put the 50.000 $ of the loan amount into a term deposit account on a monthly basis for 5 years, so that you pay your installments with the interest earned. To achieve an exact match between installments and interest income, what should be the annual interest rate on the term deposit? a) 38.15% b) 29,08% c) 34.23% d) 25,19%Step by Step Solution
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