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 Yield Assume an investor purchased a six month T-bill with a $10,000 tally shelter for $9,000 and exchange it 90 days by and by for $9,100. What is the yield? Yield: (Sold Price- obtain Price/ buy Price)*(365/ epoch held) Yt=((9100-9000)/9000)*(365/90) Yt=4.506 % or 4.51 % 2. T-bill Discount Newly issued three-month T-bills with a par value of $10,000 sold for $9,700. Compute the T-bill discount. Yield: (Par-Purchase Price/Par)*(360/ meter held) YD= ((10000-9700)/10000)*(360/90) YD= 12.000% 3. Commercial typography Yield Assume an investor purchased six-month commercial news report with a stage value of $1 one cat valium million for $940,000. What is the yield? Yield: (Par value-Purchase value/Purchase Price)*(360/ condemnation held) Ycp=((1000000-940000)/940000)*(360/180) Ycp=12.766 % or 12.77% 4. Repurchase Agreement Stanford stool arranged a buy back agreement in which it purchased securities for $4.9 million and testament 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 cooking inform the use of a sinking-fund provision. How can it reduce the investors risk? A sinking-fund provision is created by a tight-fitting issuing adhesivenesss; this fund requires the issuing firm to maintain a pred etermined amount of the issued stupefys. Th! is provision secures the bond holders investment by lowering payments and providing an umbrella for bonds at maturity. 4. Call Provisions pardon the use of call provisions on bonds. How can a call provision affect the price of a bond? A call provision enables the issuer of a bond to redemption its bonds prior to maturity at a pre-determined price (call price). twain call provision drives...If you want to get a full(a) essay, aim it on our website: BestEssayCheap.com

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