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Please show solutions with equations used etc. so I can understand the process! Question #2 [8 marks] Montreal hosted the 1976 Summer Games at a
Please show solutions with equations used etc. so I can understand the process!
Question #2 [8 marks] Montreal hosted the 1976 Summer Games at a cost of $1.5 billion. In order to fund the games, Quebec sold $1.5 billion worth of 30 year bonds (i.e. it took 30 years to pay off the debt incurred by the games). Suppose that the bonds were reedemable at 103, paid semi-annual coupons at a nominal rate of 2.6% compounded semi-annually and, at the time of issue, rates in the marketplace (i.e. expected yield rates by investors) were 6.09% per annum. a. To the closest million, determine the amount that was raised by issuing the bonds (i.e. price paid by investors for all of the bonds). b. Suppose that the intention was to raise the entire $1.5 billion. To the closest million, determine the total face value of the bonds that should have been issued. C. Suppose that a sinking/investment fund (i.e. an ordinary annuity) is setup by the Quebec Govern CHIC III UI UCI Eu pay CHIC ituemption value of theStep by Step Solution
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