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Essentials of Investments- Bodie, Kane and Marcus.

PLEASE WITHOUT EXCEL and WITHOUT FINANCIAL CALCULATOR And PLEASE do not abbreviate the process. If you need to calculate the cash flows or the present value, please clarify and step by step without abbreviating the process. I mean do not write like this: "32.5 x PVIFA @ 3%, 10 years" or like this: "= 32.5 / 1.06 ^ 0.5 .... 1032.5 / 1.06 ^ 20 = 1057.79" . I NEED TO SEE THE PROCEDURE. STEP BY STEP. SHOW FORMULAS, SHOW EVERYTHING. DO NOT ABBREVIATE THE PROCESS.

1. A 20-year bond with a 6.5% semiannual coupon has a 5-year call option with a call price of $ 1010. Currently the bond is sold with a YTM of 6%.

a. What is the YTC?

b. What would be the YTC if the exercise price were $ 960?

c. What would be the YTC if the exercise price were $ 960 but the bond was called in 2 years?

Financial Management, Finance

  • Category:- Financial Management
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