The Bank of Tokyo- Mitsubishi Issues 100,000 Bonds as Part

question 27

Essay

The Bank of Tokyo- Mitsubishi issues 100,000 bonds as part of its liquidity and interest risk management instrument. The bonds have a face value of $36,000 each, a bond interest rate of 12% per year payable semiannually, and a maturity date of 16 years. The current price of the bond is $69,662. Write the correct equation to determine if this bond should be purchased using the IRR method, assuming an investor has a MARR of 4% per year, compounded quarterly.

---

Definitions:

Nineteenth Century

The period from January 1, 1801, to December 31, 1900, marked by major social, economic, and technological changes worldwide.

Standard Oil

A major American company founded by John D. Rockefeller and associates, dominating the oil industry and later broken up due to antitrust laws.

Petroleum Industry

The sector involved in the exploration, extraction, refining, transportation, and marketing of petroleum products.

Antitrust Policy

Government regulations designed to promote competition and prevent monopolies and other forms of market dominance that harm consumers.