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Home / Questions / INSTRUMENT Treasury Bonds_________________________________________________________________

INSTRUMENT Treasury Bonds_________________________________________________________________

INSTRUMENT Treasury Bonds_________________________________________________________________________

CURRENCY Australian dollars_________________________________________________________________________

MATURITY DATE 21 October 2018_________________________________________________________________________

COUPON 3.25% per annum, paid semi-annually in arrears, on theFace Value of the bonds_________________________________________________________________________

REDEMPTION: Par

_________________________________________________________________________

COUPON PAYMENT DATES 21 April and21 October in each year commencing on 21 April 2014, to andincluding the Maturity Date_________________________________________________________________________

DENOMINATION $1,000 Face Value_________________________________________________________________________

Based on current market prices for this bond, it is possible toinfer that investors require a return of 3% per annum, compoundingsemi-annually, on investments of this risk. Assuming this requiredrate of return remains constant through to the bond’s maturitydate, how much do you expect this bond to trade for on 21 October2014, immediately after the coupon interest has been paid to theholder of the bond?

Dec 04 2019 View more View Less

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