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- To secure a return of 4%, at what price should a bond be purchased if it is redeemable at P 1,000 in 10 years and plays annual dividends of P 35,00?Find the limiting value of Macaulay duration as maturity is increased to infinity of an 8% coupon bond that is trading at a yield of 8% and pays coupons every 6 months. Please round your numerical answer to the nearest integer.suppose that you invest $100 today in a risk-free investment and let the 4 percent annual intrest rate compound. Rounded to the full dollars, what will be the value of your investment 4 years from now?
- 10. Find the amount due at the end of 15 months whose present value is P2,000 at 5% simple discount. ANSWER: 2,133,33The Effective Annual interest rate (EAR) is the appropriate way to annualize interest rates “Discuss along with its uses.If the total interest paid equals the borrowed principal over 20 years, determine the discount rate applied. Determine the equivalent simple interest rate.
- Consider a bond with a face value of $2,000 that pays a coupon of $150 for 10 years. Suppose the bond is purchased at $500, and can be resold next year for $400. What is the rate of return of the bond? 10% 0% -10% 20%Assume that a bond was bought for $500 and is now sold for $450. The interest (yield) on that bond has ... Group of answer choices a. Increased b. Decreased c. Can not be determined. Need more information.Please provide a step by step solution A bond with a par value of P2,000 and with a bond rate of 9% payable annually is to be redeemed at P2,200 at the end of 6 years from now. If it is sold now, what should be the selling price to yield 8%?
- A company has issued a 20 year bonds, with a face value of $50,000 interest at 8% is paid quarterly. If an investor desires to earn 12% compounded quarterly, what would be the purchase price of the bond? $12, 654.40 $42, 563 $35, 062.60 $ 34, 900.80Henry has a five-year 1,000,000 bond with coupons at 6% convertible semi-annually. Fiona buys a 10-year bond with face amount X and coupons at 6% convertible semi-annually. Both bonds are redeemable at par. Henry and Fiona both buy their bonds to yield 4% compounded semi-annually and immediately sell them to an investor who will yield 2% compounded semi-annually. Fiona earns the same amount of profit as Henry. Calculate X.You want to open a savings plan for your future retirement. You are considering the following two options: Option 1: You deposit $1,000 at the end of each quarter for the first 10 years. At the end of 10 years, you make no further deposits, but you leave the amount accumulated at the end of 10 years for the next 15 years. Option 2: You do nothing for the first 10 years. Then you deposit $6,000 at the end of each year for the next 15 years. If your deposits or investments earn an interest rate of 6% compounded quarterly and you choose Option 2 over Option 1, then at the end of 25 years from now, you will have accumulated (a) $7,067 more. (b) $8,523 more. (c) $14,757 less. (d) $13,302 less.