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gewusel gewusel
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6 years ago
A $100 000.00, 7.2% bond with quarterly coupons redeemable at par is purchased 11 years before maturity to yield 6% compounded semi-annually. Determine the premium or discount.
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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wrote...
6 years ago
FV = $100 000; P/Y = 4; C/Y = 2; c =   = 0.5; n = 11(4) = 44; p =  - 1 = .014889157
Since b > i adjusted, the bond sells at a premium
Premium=[100000(0.018) - 100000(0.014889157)]
   = 311.08(32.111121) = $9989.13
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