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Today Tania buys two securities on the bond market, maturing in 10 years. - The Alpha bond costs $8,500 today, pays annual coupons of $100
Today Tania buys two securities on the bond market, maturing in 10 years.
- The Alpha bond costs $8,500 today, pays annual coupons of $100 per year (first coupon in an exact year), and has a face value of $10,000.
- The Beta bond costs $7,500 today, pays no coupons and has a face value of $10,000.
a) Represent the timeline of Tania's investment over the next ten years.
b) Calculate the NPV of Tania's investment considering an annual discount rate of 2%.
c) Calculate the IRR of Tania's investment.
- The Alpha bond costs $8,500 today, pays annual coupons of $100 per year (first coupon in an exact year), and has a face value of $10,000.
- The Beta bond costs $7,500 today, pays no coupons and has a face value of $10,000.
a) Represent the timeline of Tania's investment over the next ten years.
b) Calculate the NPV of Tania's investment considering an annual discount rate of 2%.
c) Calculate the IRR of Tania's investment.
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Electronic Commerce
Authors: Gary Schneider
12th Edition
1305867815, 9781305867819
