The Florida Investment Fund buys 78 bonds of the Gator Corporation through a bro

Question

The Florida Investment Fund buys 78 bonds of the Gator Corporation through a broker. The bonds pay 11 percent annual interest. The yield to maturity (market rate of interest) is 12 percent. The bonds have a 20-year maturity. Use Appendix B and Appendix D. Using an assumption of semiannual interest payments:

a. Compute the price of a bond

b. Compute the total value of the 78 bonds

Here Is the Appendix Links. B and D respectively.

https://anonfiles.com/file/4f019a11db9f668ff7ecbab042629aaf

https://anonfiles.com/file/d65ecfc44ccb7e930f66dd80c0ee0b0b

Don't Guess. I only give points for right answers.

b. Compute the total value of the 78 bonds

Here Is the Appendix Links. B and D respectively.

https://anonfiles.com/file/4f019a11db9f668ff7ecbab042629aaf

https://anonfiles.com/file/d65ecfc44ccb7e930f66dd80c0ee0b0b

Don't Guess. I only give points for right answers.

Explanation / Answer

A) assuming the bond's FV = $1000

P= 110PVID(12%,20)+1000PVIF(12%,20)

P= $925.306

b) total value of 78 bonds=925.306x78= $72173.834

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