QUESTION 11 What is the annual required rate of a 10-year bond that has 6% annual...
QUESTION 11 What is the annual required rate of a 10-year bond that has 6% annual payment and $1000 in its fair value (present value)? A. 4% B. 6% C. 8% D. 10% E. 12% 12.5 points
QUESTION 12 What is the annual required rate of a 10-year bond that has 6% annual payment and $865.80 in its fair value (present value)? A. 4% B. 6% C. 8% D. 10% E. 12%
Homework Answers
| 11) | B. 6% | |||||
| Working: | ||||||
| Annual required rate | = | =rate(nper,pmt,pv,fv) | ||||
| = | 6% | |||||
| Where, | ||||||
| nper | 10 | |||||
| pmt | $ 60 | |||||
| pv | $ -1,000 | |||||
| fv | $ 1,000 | |||||
| 12) | C. 8% | |||||
| Working: | ||||||
| Annual required rate | = | =rate(nper,pmt,pv,fv) | ||||
| = | 8% | |||||
| Where, | ||||||
| nper | 10 | |||||
| pmt | $ 60 | |||||
| pv | $ -865.80 | |||||
| fv | $ 1,000 | |||||
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