Finance

Problem 1

Assume that a $1000 treasury bill is quoted to pay 5% interest over a six-month period.

1. How much interest would the investor receive?

2. What will be the price of the treasury bill?

3. What will be the effective yield?

Problem 2 

Given a 15-year bond that sold for $1,000 with a 9% coupon rate, what would be the price of the bond if interest rates in the marketplace on similar bonds are now 12%?  Interest is paid semi-annually.  Assume a 15 year-time period.

Must show all work and calculations.  Work must be legit.  I have already performed work and just looking to double check my own calculations.  Therefore, if you are not good in finance please do not reply to my work.