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In: Accounting

For the following problems show your steps if using a financial calculator or upload the excel...

For the following problems show your steps if using a financial calculator or upload the excel spreadsheet if using excel.

  1. You just purchased a $1,000 par value bond with a 10 percent annual coupon rate and a life of 20 years. The bond has four years remaining until maturity, and the yield to maturity is 12 percent. How much did You pay for the bond? Is it a premium or discount bond?

  1. A $1,000 par value bond, paying $50 semiannually, with an 8 percent yield to maturity and five years remaining to maturity should sell for how much?

  1. Kris would like to purchase a bond that has a par value of $1,000, pays $100 at the end of each year in coupon payments, and has three years remaining until maturity. If the prevailing annualized yield on other bonds with similar characteristics is 12 percent, how much will Kris pay for the bond? Is it a premium bond or a discount bond?

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