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2 answers:
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Answer:
7
Step-by-step explanation:
Terms are the numbers and/or variables within an equation. For example you have 5 terms in that equation:
The first term is:
The second term is:
The third term is:
The fourth term is:
The fifth term is:
Coefficients are the numbers in front of variables (this includes negative/subtraction signs). For example you have 5 coefficients in this equation:
The first coefficient is: 3
The second coefficient is: 7
The third coefficient is: 2
The fourth coefficient is: 9
The fifth coefficient is: -5
Answer:
3.216%
Step-by-step explanation:
This bond sells at a higher price or value, which means that its coupon is bogus of market interest rate. Therefore, the minimum yield rate that accounts for the possibility of the bond being called is calculated at the earliest possible call date. Let say exactly 15 years from the date of purchase, because that would be the most disadvantageous date for the bondholder for the call to occur.
The minimum semiannual yield:
j= i²/2
i² = 2j
which therefore satisfies the expression below for the worst possible case scenario yield:
1722.25 = 0.04*1100*+
Also, with the use of a financial calculator (making sure that the calculator is not in BGN mode)
1722.25 PV, -44 PMT, -1100 FV, 30 N, CPT 1/Y.
j can be found to be 1.608245%. The corresponding nominal annual rate compounded semiannually is (X) = i² = 2j =3.216%