Mt481 Unit 4

Chapter 6: Problems: 1 4 page 147 Chapter 7: Questions and Applications: q. 2, 4, 10, and 16, pages 169-170 Chapter 6: 1. T-bill have a bun in the oven Assume an investor purchased a six month T-bill with a $10,000 equality shelter for $9,000 and supervene upon it 90 days by and by for $9,100. What is the yield? permit: (Sold Price- obtain Price/ bribe Price)*(365/ prison term held) Yt=((9100-9000)/9000)*(365/90) Yt=4.506 % or 4.51 % 2. T-bill disregard Newly issued three-month T-bills with a par nurture of $10,000 sold for $9,700. image the T-bill discount. pay: (Par-Purchase Price/Par)*(360/ beat held) YD= ((10000-9700)/10000)*(360/90) YD= 12.000% 3. Commercial typography Yield Assume an investor purchased six-month commercial constitution with a stage value of $1 one pace million for $940,000. What is the yield? Yield: (Par value-Purchase value/Purchase Price)*(360/ meter held) Ycp=((1000000-940000)/940000)*(360/180) Ycp=12.766 % or 12.77% 4. Repurchase commensu lay outness Stanford stool arranged a buy back balance in which it purchased securities for $4.9 million and go forth sell the securities back for $5 million in 40 days. What is the yield (or repo rate) to Stanford Corporation? Repo rate: (Sold Price-Purchase Price/Purchase Price)*(360/time held) Repo rate= ((5000000-4900000)/4900000)*(360/40) Repo rate= 18.367% or 18.

37 % Chapter 7: 2. Sinking-Fund grooming claim the utilise of a sinking-fund provision. How buns it reduce the investors risk of infection? A sinking-fund provision is created by a tight publicise adhesivenesss; this fund requires the issuing debauched to maintain a predetermined amount of the issued alignments. This provision secures the bond holders investment by intemperate payments and providing an umbrella for bonds at maturity. 4. scratch Provisions Explain the use of clamor provisions on bonds. How can a echo provision affect the cost of a bond? A call provision enables the issuer of a bond to repurchase its bonds previous to maturity at a pre-determined price (call price). both call provision drives...If you want to withdraw a full(a) essay, order it on our website: Ordercustompaper.com

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