Interested to Buy Any Domain ? << Click Here >> for more details...
ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.7 : An engineering investor purchases a $1000 bond that matures in 25 years. The coupon rate is 8 %. The purchase price is at 95 or 95 % of the par bond value. (a) What is the purchase price of the bond? (b) How much discount is enjoyed by the investor on average each year? (c) Find the income generated from coupon rate each year. (d) Find the overall interet rate or Yield to Maturity (YTM) by using the formula : YTM = [ Answer in (c) + Answer in (b) ] x 200 / [ par bond value + Answer in (a) ].
- 1 Answers
- 1840 Views
- I also Faced
- E-Mail Answers
Answer Posted / kangchuentat
ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.7 : (a) Purchase price = 0.95 x par bond value = 0.95 x $1000 = $950. (b) Annual discount = (total discount) / (25 years) = (0.05 x par bond value) / 25 = 0.05 x $1000 / 25 = $2. (c) Annual coupon rate payment = par value x coupon rate = $1000 x 0.08 = $80. (d) YTM = [ Answer in (c) + Answer in (b) ] x 200 / [ par bond value + Answer in (a) ] = (80 + 2) x 200 / (1000 + 950) = 8.41 %. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.
| Is This Answer Correct ? | 0 Yes | 0 No |
Post New Answer View All Answers
hai please please if any one have useful test related and interview based question plz send me at saify_0@hotmail.com i will be thankfull
What is the Import Procurement Cycle ? and what are the customization steps in SAP ?
For what ration of Lengh/Dia. of tank (Jacketed tank), maximum heat transfer area is available?
In Galvonised iron and stainsteel pipes, in which pipe friction losses will more and why ?
i want to knowwhat kind of questions in interview in adnoc?
What industries require filtered compressed air?
Are there any special considerations to be taken into account for combusting ammonia?
Are there any general rules that should be considered when designing a slurry piping system?
my qualification is b.tech- industrial biotech. i was read about many chemical engineering subject as a allied like unit operation, chemical thermodynamics, chemical reaction engineering , mass transfer and separation, downstream processing and principle of chemical engineering. and i have 2 yrs working exprience on in the field of instrumentation and control... and my query is "can i able work as process technologist" and which subject i want conc. more?........
What is higher heating value and lower heating value? Is it positive or negative?
What is a good relation to use for calculating tube bundle diameters?
Explain global warming from a common man's and an engineer's perspective?
How can one determine if a particular solid can be fluidized as in a fluidized bed?
how to improve recovery of product in packed tower(raising ring) recovery of vinyl acetate from VA+WO ( vinyl acetate +waste oil mixture)
what is defferance between tubular & automotive plate battery
