Answer to Question #137920 in Finance for Thabiso

Question

4 points) How does the equation for valuing a bond change if semiannual payments are made? Find the value of a 10-year, semiannual payment, 10 percent coupon bond if nominal rd = 13%.
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Question
Asked Sep 7, 2020
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(4 points) How does the equation for valuing a bond change if semiannual payments are made? Find the value of a 10-year, semiannual payment, 10 percent coupon bond if nominal rd = 13%.
2.2 Suppose a 10-year, 10 percent, semiannual coupon bond with a par value of R1 000 is currently selling for R1 135.90, producing a nominal yield to maturity of 8 percent. However, the bond can be called after 5 years for a price of R1 050.
i) (3 points) What is the bond’s nominal yield to call?
ii) (2 points) If you bought this bond, do you think you would be more likely to earn the
YTM or the YTC? Why?

Answer 1

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