A bank accepted bill (BAB) has a face value of $1,000,000 and will be mature in...

  

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A bank accepted bill (BAB) has a face value of $1,000,000 and will be mature in 178 days. If this BAB is currently trading at $972,000, how much is its implied yield? Hint: if the answer is 15.12%, please input 15.12. No marks will be given if students input 0.1512 or 15.12%. Question 6 ABC has issued a 3-year coupon bond with face value $1,000. Coupon rate is 7 percent per annum and the coupon is paid semi- annually. What is the fair price of the bond if the yield to maturity is 6 percent per annum? Answer: Question 7 AMG Ltd issued a preference share with a face value of $400. The preferred dividend rate is 8.6%. If investors' required rate of return is 5.4 percent per annum, what is the fair value of an AMG preference share today? ABD Ltd expect the dividend per share of its ordinary share for the next two years to be $2.0 and $3, respectively. Then the dividend will grow by 14% per annum till infinity. If investors require a rate of return of 23% p.a. what is the fair value of an ABD ordinary share today? Answer: Following are the potential returns of ABC Ltd shares in 2023. Calculate the expected return. Prob. Return (%) 10% 3 20% 6 40% 12 30% -3 Calculate the standard deviation of returns on ABC Ltd shares, using the below forecast data as of 2023. Return (%) Prob. 0.25 -10 0.50 12 0.25 20 A bank accepted bill (BAB) has a face value of $1,000,000 and will be mature in 178 days. If this BAB is currently trading at $972,000, how much is its implied yield? Hint: if the answer is 15.12%, please input 15.12. No marks will be given if students input 0.1512 or 15.12%. Question 6 ABC has issued a 3-year coupon bond with face value $1,000. Coupon rate is 7 percent per annum and the coupon is paid semi- annually. What is the fair price of the bond if the yield to maturity is 6 percent per annum? Answer: Question 7 AMG Ltd issued a preference share with a face value of $400. The preferred dividend rate is 8.6%. If investors' required rate of return is 5.4 percent per annum, what is the fair value of an AMG preference share today? ABD Ltd expect the dividend per share of its ordinary share for the next two years to be $2.0 and $3, respectively. Then the dividend will grow by 14% per annum till infinity. If investors require a rate of return of 23% p.a. what is the fair value of an ABD ordinary share today? Answer: Following are the potential returns of ABC Ltd shares in 2023. Calculate the expected return. Prob. Return (%) 10% 3 20% 6 40% 12 30% -3 Calculate the standard deviation of returns on ABC Ltd shares, using the below forecast data as of 2023. Return (%) Prob. 0.25 -10 0.50 12 0.25 20

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1 To calculate the implied yield of the BAB we can use the formula Implied yield Face value Market price Face value 365 Days to maturity Plugging in t... View the full answer