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QQuestions #2 and #4. I understand the answer, but am looking for how to solve them. 2) A bond was issued with a 10 year
QQuestions #2 and #4. I understand the answer, but am looking for how to solve them.
2) A bond was issued with a 10 year maturity, a $1000 Face Value, 10% coupon rate paid semi- annually, and a 11% YTM. After five years the YTM for the bond has become 12%, what is the price of the bond now? A. $926.40 B. $927.90 C. $940.25 D. $962.31 3) All else equal, the efficient frontier: A. Shifts to the left as the correlation between assets decreases B. Identifies portfolios that are risk efficient but not return efficient C. Shifts to the left as the number of investable assets decreases. D. Is the location of a portfolio invested 100% in bonds 4) You know that ri = 5.0%, f2 = 5.8%, and r3=6% (the subscript indicates the year). What is the price of a 3-year government bond that pays a 10% annual coupon and has a $1000 face value? A. $1024.87 B. $1106.92 C. $1108.84 D. $1113.40Step by Step Solution
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