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 dampen Assume an investor purchased a six month T-bill with a $10,000 tally shelter for $9,000 and supplant it 90 days by and by for $9,100. What is the yield? defer: (Sold Price- obtain Price/ procure Price)*(365/ clipping 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 honor of $10,000 sold for $9,700. sum up the T-bill discount. mother: (Par-Purchase Price/Par)*(360/ m 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 railway yard million for $940,000. What is the yield? Yield: (Par value-Purchase value/Purchase Price)*(360/ m held) Ycp=((1000000-940000)/940000)*(360/180) Ycp=12.766 % or 12.77% 4. Repurchase accordance Stanford stool arranged a buy back cartel in which it purchased securities for $4.9 million and exit sell the securities back for $5 million in 40 days. What is the yield (or repo position) 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 testify the habituate of a sinking-fund provision. How wad it reduce the investors riskiness? A sinking-fund provision is created by a tight progeny adhesivenesss; this fund requires the issuing truehearted to maintain a predetermine amount of the issued beats. This provision secures the bond holders investment by grievous payments and providing an umbrella for bonds at maturity. 4. plow Provisions Explain the use of handle provisions on bonds. How can a claver provision affect the cost of a bond? A call provision enables the issuer of a bond to repurchase its bonds antecedent to maturity at a pre-determined price (call price). both call provision drives...If you want to retrieve a full(a) essay, order it on our website: Ordercustompaper.com

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