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An investor is purchasing at issue £250,000 nominal a bond with an optional term between 6 years and 17 years that is re
Posted: Tue Nov 16, 2021 8:28 am
by answerhappygod
- An Investor Is Purchasing At Issue 250 000 Nominal A Bond With An Optional Term Between 6 Years And 17 Years That Is Re 1 (23.18 KiB) Viewed 128 times
An investor is purchasing at issue £250,000 nominal a bond with an optional term between 6 years and 17 years that is redeemable at 95%. The bond pays coupons of 6.5% per annum at every 4 months in arrears. Assuming that the investor is subject to 18% income tax and 30% capital gains tax and is looking to obtain a net effective yield of 1.2% per 4 months, calculate, to 2 decimal places, the price paid by the investor. Answer: Check