1. Consider a 10000 par value, 4 year bond bearing a 5% nominal semiannual coupon rate. Coupons pay out every six-month period, starting six months after the bond is purchased. The bond is purchased for P and earns an annual rate of j compounded semiannually, and the bond redeems at par value. The value (i.e. outstanding balance of the amortization schedule) of the bond immediately after the 3rd coupon is paid is equal to 9247.42. Find the purchase price P. Round your answer to the nearest whole number. Answer: __________________
2. A 10000 par value bond with 8% semiannual coupons is being sold 3 years and 4 months prior to maturity. Find the market price or clean-price at the time of sale if the bond redeems at par and was priced to yield 10% compounded semiannually. Give your answer rounded to two decimal places. Answer: __________________
3. A 30-year 1000 par value bond with coupons at 9% payable semiannually and a redemption value of 1100 is purchased for a price that results in a yield of 12% compounded semiannually. Suppose that the bond is called (i.e. redeemed) prior to the actual maturity date and results in an actual nominal yield rate convertible semiannually of 14%. Note: Assume that the bond is called immediately after a coupon payment is made. Calculate the number of years the bond was held. Round your answer to the nearest whole number. Answer: __________________

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