Example 1:

Consider a 1000$ par value bond that

has to be redeemed in two years with
an 8% convertible semiannually
coupons bought to yield a 6%
convertible semiannually
a! Construct the amorti"ation table
b! #edo the same table assuming a
yield o$ 10% convertible
semiannually
E%&'()E:
& bond can be redeemed on a coupon
date anytime between 18 and ** coupon
periods $rom now +he bond has $ace
amount 100 and coupon rate 10% per
coupon period ,ind the range o$ prices
depending upon redemption date i$ the
yield rate is
-i! .% per coupon period/ and
-ii! 1.% per coupon period