5. The taltola bond has a duration of 2.87 years and Beltola bond has Tk.1,000 par...
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5. The taltola bond has a duration of 2.87 years and Beltola bond has Tk.1,000 par value, 3 years to maturity, and an 10 percent yield paying semiannual interests at 12 percent. The current yield curve represents an inverted trend indicating decline in future interest rates. Under these circumstances, you have to decide which bond you have to invest in. Calculate the duration of Beltota bond and tell us which bond you will invest in and why. (6 points) 5. The taltola bond has a duration of 2.87 years and Beltola bond has Tk.1,000 par value, 3 years to maturity, and an 10 percent yield paying semiannual interests at 12 percent. The current yield curve represents an inverted trend indicating decline in future interest rates. Under these circumstances, you have to decide which bond you have to invest in. Calculate the duration of Beltota bond and tell us which bond you will invest in and why. (6 points)
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Answer rating: 100% (QA)
PVC t Duration of the Bond PVC PVC Present value of the cash flow PVC Cash flow PVF PVF or present v... View the full answer
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
Posted Date:
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