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plz show the step without using excel 6. Determine the price of the following bonds: (a) A 12-year $5000 bond, redeemable at 101.75, with coupons
plz show the step without using excel
6. Determine the price of the following bonds: (a) A 12-year $5000 bond, redeemable at 101.75, with coupons at :12) = 5% for the first 6 years and at ; 2) = 4.5% thereafter, bought to yield ;(2) = 6% for the first 5 years and ;(2) = 5.5% thereafter. (3 marks) (b) An 8-year $2000 bond, redeemable at par, with semi-annual coupons starting at $150 and each succeeding coupon being 90% of the preceding coupon, purchased to yield ;2) = 7%. (2.5 marks) (c) A 10-year $10,000 par-value bond with semi-annual coupons that starts at $280 and increase by $12 every 6-months thereafter. The desired yield rate is : 2) = 5%. (2.5 marks) (d) A perpetual bond that pays quarterly coupons of $100, with each succeeding coupon increasing by 0.75% per quarter forever, with a desired yield rat of ill) = 6%. (2 marks) 6. Determine the price of the following bonds: (a) A 12-year $5000 bond, redeemable at 101.75, with coupons at :12) = 5% for the first 6 years and at ; 2) = 4.5% thereafter, bought to yield ;(2) = 6% for the first 5 years and ;(2) = 5.5% thereafter. (3 marks) (b) An 8-year $2000 bond, redeemable at par, with semi-annual coupons starting at $150 and each succeeding coupon being 90% of the preceding coupon, purchased to yield ;2) = 7%. (2.5 marks) (c) A 10-year $10,000 par-value bond with semi-annual coupons that starts at $280 and increase by $12 every 6-months thereafter. The desired yield rate is : 2) = 5%. (2.5 marks) (d) A perpetual bond that pays quarterly coupons of $100, with each succeeding coupon increasing by 0.75% per quarter forever, with a desired yield rat of ill) = 6%. (2 marks)Step by Step Solution
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