Questions from Business Mathematics

Q: Dash Canada offers two long-distance telephone plans. Plan X

Dash Canada offers two long-distance telephone plans. Plan X costs 6.5 cents per minute for calls between 8 a.m. and 6 p.m. weekdays (business hours) and 4.5 cents per minute at other times. Plan Y co...

Q: A $1000, 6.5% coupon, 20-

A $1000, 6.5% coupon, 20-year Government of Canada bond was issued on June 15, 2016. At what price did it trade on December 10, 2020, when the market’s required return was 5.2% compounded semiannuall...

Q: If a broker quotes a price of 111.25 for a

If a broker quotes a price of 111.25 for a bond on September 10, what amount will a client pay per $1000 face value? The 7% coupon rate is payable on May 15 and November 15 of each year.

Q: Laurentian Airways is preparing for the replacement of one of its passenger

Laurentian Airways is preparing for the replacement of one of its passenger jets in three years by making payments to a sinking fund at the beginning of every six months for the next three years. The...

Q: The municipality of Duncan has financed a sewage treatment plant by issuing

The municipality of Duncan has financed a sewage treatment plant by issuing $18 million worth of sinking fund debentures. The debentures have a 15-year term and pay a coupon rate of 9% compounded semi...

Q: Four years after the issue of a $10,000,

Four years after the issue of a $10,000, 9.5% coupon, 20-year bond, the rate of return required in the bond market on long-term bonds was 7.8% compounded semiannually. 1. At what price did the bond th...

Q: Four and one-half years ago, Glenda purchased 15 $

Four and one-half years ago, Glenda purchased 15 $1000 bonds in a Province of New Brunswick issue carrying an 8.5% coupon and priced to yield 9.8% (compounded semiannually). The bonds then had 18 year...

Q: A $1000 face value, 6.8% coupon,

A $1000 face value, 6.8% coupon, Province of Ontario bond with 18 years to run until maturity is currently priced to yield investors 6.5% compounded semiannually until maturity. How much lower would t...

Q: Two and one-half years ago, Nova Scotia Power sold

Two and one-half years ago, Nova Scotia Power sold an issue of 25-year, 8% coupon bonds. If the current semiannually compounded return required in the bond market is 6.9%, calculate the percent capita...

Q: Calculate the yield to maturity on a $1000 face value bond

Calculate the yield to maturity on a $1000 face value bond purchased for $1034.50 if it carries a 7.9% coupon and has 8 1 2 years remaining until maturity.