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) ].



ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.7 : An engineering investor purchases a $1000 bond..

Answer / 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

More Chemical Engineering Interview Questions

please send me Ongc Exam Previous Papers... To MU MAil Id: muyyaboina.kalyani@gmail.com

1 Answers  


why relative humidity is different in different places

3 Answers  


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?........

0 Answers  


What is chemicals?

1 Answers   Thirumalai Chemicals,


Question 71 - (a) The byte is the basic building block of computer data used in chemical engineering process simulation where 16 bits make a word, 4 bits make a nibble, 32 bits make a quad word and 8 bits make a byte. Then how many nibbles are there in a megabytes? (b) In computer data items, let : 1 bit - counts from 0 to 1, 8 bits - counts from 0 to 255, 16 bits - counts from 0 to A. What is the value of A? (c) In a binary system of 4 bits, if 1100 = 12, 1101 = 13, 1110 = 14, 1111 = 15, B = 16, then guess the value of B. (d) By using any form of tools, find the exact value of 2 power 64 or 2^64.

1 Answers  






cetane no. and sulphur required in diesel fuel for euro-IV

2 Answers   IOCL,


Are there any methods of preventing cracking of carbon steel welds in refining environments?

0 Answers  


plz send me hpcl and reliance entrance test papers on my id s,kumar_bk@yahoo.co.in

1 Answers   Reliance,


What are some common problems associated with dilute phase pneumatic conveying?

0 Answers  


What types of pneumatic conveying systems are typically used?

0 Answers  


How fouling effected the heat transfer rate?

0 Answers  


Question 67 – In order to predict the wastewater production, the population number has to be understood. The population data is : 72000 (for year 1961 or P-1961), 85000 (for year 1971 or P-1971), 110500 (for year 1981 or P-1981). (a) Find the average population increase, or [ (P-1981 - P-1971) + (P-1971 - P-1961) ] / 2. (b) Find the average percentage population increase, or [ (P-1981 - P-1971) / P-1971 + (P-1971 - P-1961) / P-1961 ] / (2) X 100. (c) Find the incremental increase or P-1981 - 2 (P-1971) + P-1961. (d) Let Po = P-1981. After 2 decades or n = 2, the population is P-2001. By using arithmetical increase method, find P-2001 = Po + n (Answer for a). (e) By using incremental increase method, find P-2001 = (Answer of d) + n (n + 1) (Answer of c) / 2. (f) By using geometrical increase method, find P-2001 = Po [ 1 + (Answer of b) / 100 ] ^ n where ^ is power sign, or 1 ^ 2 = 1 x 1 = 1. (g) If the actual P-2001 = 184000, which method of estimation is more accurate, based on your answer in (d), (e) and (f)?

1 Answers  


Categories
  • Civil Engineering Interview Questions Civil Engineering (5085)
  • Mechanical Engineering Interview Questions Mechanical Engineering (4451)
  • Electrical Engineering Interview Questions Electrical Engineering (16632)
  • Electronics Communications Interview Questions Electronics Communications (3918)
  • Chemical Engineering Interview Questions Chemical Engineering (1095)
  • Aeronautical Engineering Interview Questions Aeronautical Engineering (239)
  • Bio Engineering Interview Questions Bio Engineering (96)
  • Metallurgy Interview Questions Metallurgy (361)
  • Industrial Engineering Interview Questions Industrial Engineering (259)
  • Instrumentation Interview Questions Instrumentation (3014)
  • Automobile Engineering Interview Questions Automobile Engineering (332)
  • Mechatronics Engineering Interview Questions Mechatronics Engineering (97)
  • Marine Engineering Interview Questions Marine Engineering (124)
  • Power Plant Engineering Interview Questions Power Plant Engineering (172)
  • Textile Engineering Interview Questions Textile Engineering (575)
  • Production Engineering Interview Questions Production Engineering (25)
  • Satellite Systems Engineering Interview Questions Satellite Systems Engineering (106)
  • Engineering AllOther Interview Questions Engineering AllOther (1379)