Question
Q2: Three bonds walk into a bar...Bond A has a face value of $36000, a maturity of 10 years. and a (nominal semi-annual) coupon rate
Q2: Three bonds walk into a bar...Bond A has a face value of $36000, a maturity of 10 years. and a (nominal semi-annual) coupon rate of 2.00%. Bond A and Bond B have the same maturity, but Bond B has a face value of $28800.0. Bond A and Bond C have the same coupon rate but Bond C has a maturity of 9 years. The current (nominal semi-annual) yield rate is 1.00% and all three bonds are trading at the same premium/discount. For each part below, 2 marks for the numerical answer, 3 marks for the correct equation.
a) How much is the premium/discount of Bond A?
b) What is the coupon rate of Bond B?
c) What is the face value of Bond C?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
