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solve 6 & 7 you have 20 minues , if uou are a genius. Question 6: The bond issued by the RDR company has a

solve 6 & 7 you have 20 minues , if uou are a genius. image text in transcribed
Question 6: The bond issued by the RDR company has a coupon payment of 3% that is paid on annual basis. The bond's maturity period is 29 years and the bond's yield to maturity is 6%. An investor buys this bond for $200 and also holds it for 1 year. what will be the return earned by this investor if the yield to maturity of the bond at the year-end is 6 . The bond's face value is $900. A: The return rate is 2.55%. B: The return rate is 1.69%. C: The return rate is 3.69%. D:The return rate is 2.69%. Question 7 Ms. White has started her job and wanted to save her money in one way or other. But instead of saving money in the bank, she wished to invest it so that money could earn a return. She is intimidated by her friend's investment growth and decides to do the same. She decided to purchase a bond with face value $1,000. The annual coupon payment for the cond is 9%. The interest rate of the bond is 13% and maturity 2 . She knew that the maturity levels and interest rate of the bond impact its price. So to test the same statement, she purchased 2 more bonds with the same specifications, except, one with maturity 2 and interest rate 10% while the other with maturity 3 and interest rate 13%. Determine the impact of change in the value of the bond. A: The bond selling price is $773.98 when interest rate decrease to 10% and $819.01 when maturity increases to 3 . B: The bond selling price is $796.46 when interest rate decrease to 10% and $853.63 when maturity increases to 3 . C: The bond selling price is $982.64 when interest rate decrease to 10% and $835.07 when maturity increases to 3. D: The bond selling price is $900.00 when interest rate decrease to 10% and $979.65 when maturity increases to 3

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