You are planning to invest in the Islamic bond that has a principal value of $500 million
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Question:
You are planning to invest in the Islamic bond that has a principal value of $500 million and a face price of $1,000 with a coupon rate of 8%, and 10 years of maturity. You require a rate of return of 15% per annum as its discount rate.
a) Elaborate on the features of Bond.
b) Analyze the price of the bond today.
c) Discuss the pricing of the bond when the discount rate is: 1) 6% 2) 7% 3) 8%
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