1 you are considering a 15-year 1000 par value bond its, Ask an Expert

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1. You are considering a 15-year, $1,000 par value bond. Its coupon rate is 9%, and interest is paid semiannually. If you require an "effective" annual interest rate (not a nominal rate) of 11.17%, how much should you be willing to pay for the bond? Do not round intermediate steps. Round your answer to the nearest cent.

2. A stock is worth TL40 today. In a year, the stock price can rise by 20% or fall by 10 percent. If the risk-free rate is 5 percent, calculate the price of an American put option that expires in three years and has an exercise price of TL45.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92831727

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