Mock exam OT – question 1

This topic has 3 replies, 4 voices, and was last updated 11 years ago by John Moffat.

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November 28, 2010 at 9:11 pm #46325
adams
Participant
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In this question I didn’t see information about redemption 10%.
Only 100 it’s cash flow inlow in the 10th year.
November 29, 2010 at 9:23 am #71876
Anonymous
Inactive
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Thank you for pointing this out …. assume the question had stated
“You establish that Orihuela SA has issued bonds with a face value of $5 million and a coupon rate of 6% interest. The bonds are quoted at 93% ex int and have 10 years left to maturity and may be redeemed at par plus 10%”
Regards, Kevin
June 2, 2014 at 6:56 pm #172965
jurga
Member
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Hi I still don’t get it how to get 110 redemption’ please help.
June 3, 2014 at 8:17 am #173123
John Moffat
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If the par/nominal value is $100, then if they are redeemed at par plus 10% then they will be redeemed at $110.
As Kevin wrote, this part was missing from the question – we will correct it.
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