Question
SOLVE WHOLE QUESTION BY CALCULATOR PROVIDE SCREENSHOTS ALONG A $400,000 face value bond carrying a 5.6% coupon is issued on March 23, 2007, and expected
SOLVE WHOLE QUESTION BY CALCULATOR PROVIDE SCREENSHOTS ALONG
A $400,000 face value bond carrying a 5.6% coupon is issued on March 23, 2007, and expected to mature on March 23, 2011. The sinking fund provision requires semi-annual payments such that the full amount is saved upon maturity. The fund is expected to earn 3.7% compounded semi-annually. a. Create a complete sinking fund schedule for the issuing company. Calculate the total interest earned. b. Suppose an investor purchased $50,000 of the bond on September 23, 2007, at a market rate of 5.45% and later sells the bond on March 23, 2009, at a market rate of 3.74%. Calculate the investor's yield. c. If an investor purchased $25,000 of the bond on March 23, 2008, for $25,991.24, what would be the yield to maturity? d. For each investor in parts (b) and (c), construct a complete table detailing the amortized gain or discount accrued. Assume the investor in part (b) held onto the bond until maturity instead of selling it.
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