Schweser practice exam 3 afternoon required, afternoon, question, practice, purchase

John10

question number 13.2

why do you calculate the required terminal value assuming a semi-annual rate?

i know the bond they purchase is paid semi-annually but they want to return 6% over next 5 years dont get why its compunded over 10 periods

strikethree

They are investing in semi-annual coupon bonds, so you will use semi-annual in all calculations.



Edited 1 time(s). Last edit at Sunday, May 23, 2010 at 10:40PM by steph96.