Case

Investments Master of Business Administration Master in International finance programme Final Examination 3, November 2010 18.00-21.00 Examiner: Prof. L. Phalippou Instructions: * Write your name and school-age child number on all papers you hand in; * This is a closed-book exam. You are allowed to use a calculator and a dictionary. * Answer in the space that is provided beneath each question. Be brief, be clear, be cool… * There are 18 questions. Each for 5 points. 10 points for presentation. A.I. Four basic questions on shackles 1. You purchased an annual interest coupon trammel one stratum agone with 2 divisions remaining to due date at the time of purchase. The coupon interest assess is 10% and equating value is $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest compensation and the bonds yield to maturity had changed to 7%, your annual totality rate of return on holding the bond for that year would have been _________.  You purchased the bond at one year ago (t=0) at .This years price is. If you sold the bond at this price, you holding rate of return would be:HPR 2. A coupon bond pays interest semi-annually, matures in 2 years, has a par value of $1,000 and a coupon rate of 12%, and an effective annual yield to maturity of 10.25%.

The price the bond should sell for today is ________.  The semi-annual interest rate equals (1.1025)1/2 - 1 = 5%. Todays price of the bond is socio-economic class| Yield Curve| 1| 3.0%| 2| 3.5%| 3| 4.0%| 4| 4.5%| 5| 5.0%|  3. Given the yield curve above, the implied 1-year forward rate in 2 years (from year 2 to 3) is ________.  (1.043/1.0352) 1 = 5.01% 4. A two-year par value bond has a coupon rate of 9% and a modified term of ________.     D=((9/1.09)/100)*1 + ((9/1,09^2)/100)*2=1,92 years D*=(-D)/1+y=1.76 years A.II. A simple problem on located income a. A 9%, 16-year bond has a yield to maturity of 11% and... If you want to get a full essay, pitch it on our website: Orderessay

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