Question: 1. Triangle bonds' par value is RM1000. The bonds pay RM60 in interest every six months and will mature in 10 years. (a) Calculate the

1. Triangle bonds' par value is RM1000. The bonds pay RM60 in interest every six months and will mature in 10 years.

(a) Calculate the price if the yield to maturity on the bonds is 14%. (4 marks)

(b) Explain the impact on price if the required rate of return decreases. (2 marks)

2. Vertex bonds have a maturity value of RM1000.The bonds carry a coupon rate of 14%.Interest is paid semi-annually.The bonds will mature in 7 years.If the current market price is RM1092.65, what is the YTM on the bond? (8 marks)

3. You are currently making annual payments to a local bank of RM1200 per year. Your loan with the bank has a remaining life of 5 year. The interest rate on the loan is 15% per year. If you decide to repay the entire loan today, how much would you pay the bank. (3 marks)

4. If you deposit RM700 today into a bank account, how much will you have in 4.5 years if the account pays 12% interest compounded quarterly? (3 marks)

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