Study Session 15: Fixed Income: Basic Concepts
I got a question here relating to a practice q… i think they have something wrong here:
Debt covenants to protect bold holders are least likely to:
a) restrict issuance of new debt
b) require sinking fund redemptions
c) prohibit bond repurchases at premium to par
The answer they have listed here is C.. I’ve gone with A:
what’s the difference between effective annual yield and effective annual rate?
What’s the difference between refunding and call?
How can a bond be nonrefundable but callable?
Can you help me out with a problem I have?
Q: An annuity pays 12k every year for 5 years with the first payment at the end of Year 4. Given a 13% discount rate, the PV is?
1st step: Calc PV at beginning of year 4: -> 42,207
2nd step: FV 42,207, PMT 0, I/Y 13, N 4 -> 25,886
Elan uses N=3, I dont see why?
Please help me out here!
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