a) A bond with par value RM1,000 has coupon payment dates every April 15th and October...

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a) A bond with par value RM1,000 has coupon payment dates every April 15th and October 15th. The nominal coupon rate payable semi-annually is 7%. The bond matures on October 15th, 2023. On April 15th 2021, a coupon payment of RM35 was made. The bond is sold 80 days later with a settlement date of July 4th 2021, to yield 6% convertible semiannually. There are 183 days between the coupon payment dates of April 15th, 2021 and October 15th, 2021. Find: i) Price on the previous coupon date ii) Price-plus-accrued iii) Accrued interest iv) Price for sale on July 4th 2021 (2 Marks) (2 Marks) (2 Marks) (2 Marks) b) A 3-year RM1,000 par value bond pays semi-annual coupons at an effective rate of 6% convertible semiannually. It is sold to yield 7% convertible semi-annually. i) Show whether the bond is a premium/discount bond ii) Find the price of the bond iii) Construct the bond amortization schedule (2 Marks) (2 Marks) (13 Marks) [Total: 25 Marks] a) A bond with par value RM1,000 has coupon payment dates every April 15th and October 15th. The nominal coupon rate payable semi-annually is 7%. The bond matures on October 15th, 2023. On April 15th 2021, a coupon payment of RM35 was made. The bond is sold 80 days later with a settlement date of July 4th 2021, to yield 6% convertible semiannually. There are 183 days between the coupon payment dates of April 15th, 2021 and October 15th, 2021. Find: i) Price on the previous coupon date ii) Price-plus-accrued iii) Accrued interest iv) Price for sale on July 4th 2021 (2 Marks) (2 Marks) (2 Marks) (2 Marks) b) A 3-year RM1,000 par value bond pays semi-annual coupons at an effective rate of 6% convertible semiannually. It is sold to yield 7% convertible semi-annually. i) Show whether the bond is a premium/discount bond ii) Find the price of the bond iii) Construct the bond amortization schedule (2 Marks) (2 Marks) (13 Marks) [Total: 25 Marks]

Answer rating: 100% (QA)

a i To find the price on the previous coupon date we need to discount the remaining coupon payments and the final principal payment to the present value using the yield rate The bond has a nominal cou... View the full answer