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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
1. (Bond valuation) Hamilton, Inc. bonds have a 6 percent coupon rate. The interest is paid semiannually, and the bonds mature in 8 years. Their par value is $1,000. If your required rate of return is 4 percent, what is the value of the bond? What is the value if the interest is paid annually?
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2. (Bond relationship) ITB Plc. has recently issued three alternative coupon bonds with different times to maturity
a. Calculate the market price of each bond, assuming a yield to maturity of 8Â percent (face value 5 $1,000).
b. Which bond is more volatile? Why?
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