13 CHAPTER 2
PRICING OF BONDS
ANSWERS TO QUESTIONS FOR CHAPTER 2
(Questions are in bold print followed by answers.)
1. A pension fund manager invests $10 million in a debt obligation that promises to pay
7.3% per year for four years. What is the future value of the $10 million?
To determine the future value of any sum of money invested today, we can use the future value
equation, which is: Pn = P0 (1 + r)n where n = number of periods, Pn = future value n periods from
now (in dollars), P0 = original principal (in dollars) and r = interest rate per period (in decimal
form). Inserting in our values, we have: P4 = $10,000,000(1.073)4 = $10,000,000(1.325558466) =
$13,255,584.66.
2. Suppose that a life insurance company has guaranteed a payment of $14 million to a
pension fund 4.5 years from now. If the life insurance company receives a premium of $10.4
Lecture2Diction
Part1VarietiesofEnglish
1.1VariationinEnglish
1.2Style&Register(P14)
Formalspoken
AddressatGettysburg,1863
Fourscoreandsevenyearsagoourfathersbroughtforthonthiscontinentanew
nation,conceivedinlibertyanddedicatedtothepropositionthatallmenarecreated
equal.Nowweareengagedinagreatcivilwar,testingwhetherthatnation,orany
nationsoconceivedandsodedicated,canlongendure….
...Itisratherforustobeherededicatedtothegreattaskremainingbeforeus—that
fromthesehonoreddeadwetakeincreaseddevotiontothatcauseforwhichtheygave
thelastfullmeasureofdevotion;thatweherehighlyresolvethatthesedeadshallnot
havediedinvain;thatthisnation,underGod,shallhaveanewbirthoffreedom;and
thatgovernmentofthepeople,bythepeople,forthepeople,shallnotperishfromthe
earth.
1.3Spoken&written(1a—6b,P14)
Spoken:Moreinformal,Morepersonal,Lessconcise,Lessorganized
Lecture2Diction
Part1VarietiesofEnglish
1.1VariationinEnglish
1.2Style&Register(P14)
Formalspoken
AddressatGettysburg,1863
Fourscoreandsevenyearsagoourfathersbroughtforthonthiscontinentanew
nation,conceivedinlibertyanddedicatedtothepropositionthatallmenarecreated
equal.Nowweareengagedinagreatcivilwar,testingwhetherthatnation,orany
nationsoconceivedandsodedicated,canlongendure….
...Itisratherforustobeherededicatedtothegreattaskremainingbeforeus—that
fromthesehonoreddeadwetakeincreaseddevotiontothatcauseforwhichtheygave
thelastfullmeasureofdevotion;thatweherehighlyresolvethatthesedeadshallnot
havediedinvain;thatthisnation,underGod,shallhaveanewbirthoffreedom;and
thatgovernmentofthepeople,bythepeople,forthepeople,shallnotperishfromthe
earth.
1.3Spoken&written(1a—6b,P14)
Spoken:Moreinformal,Morepersonal,Lessconcise,Lessorganized
Exercises for Diction (2)
I. Synonyms are different in stylistic level, degree of emphasis, emotional coloring, and
collocation, e.g.
A. Complete the following sentences with the words “speaks, mention, say, express, tell.”
a. He _______ English. b. He is _______a lie. c. He _______ he is busy.
d. I am unable to ______myself clearly. e. It must not be _______.
B. Synonyms are used in different stylistic level:
Formal words Common words
孩子 ___________ ＿＿＿＿＿＿＿
读书 ___________ ＿＿＿＿＿＿＿
回复 ___________ ＿＿＿＿＿＿＿
参加 ___________ ＿＿＿＿＿＿＿
偶遇 ___________ ＿＿＿＿＿＿＿
Ｃ．Translate the following expressions
1.老部下_______________ 2. 老式样_______________ 3. 老规矩_______________
