A RM1000 face-value Bond A has the following information : YTM ( continuous compounding) : 10.0% Coupon

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Question:

A RM1000 face-value Bond A has the following information :

YTM ( continuous compounding) : 10.0%

Coupon rate ( p.a ) : 7.5%

Maturity period ( year) : 29

Expected change in YTM next year : -1%

Reminder: please answer in excel format

a. Compute the price for this bond.

b. Compute the duration for this bond.

c. Estimate the change in this bond's price in the following year and what would be the newly estimated price for this bond.

d. Please interpret what the result means to investors/trader

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Oct 03, 2023 03:52 AM

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A RM1000 face-value Bond A has the following information : YTM ( continuous compounding) : 10.0% Coupon

Question:

Expert Answer:

Certainly here are the calculations for the given bond information in Excel format a Compute the price for this bond To compute the price of the bond you can use the following formula Price C YTM 1 1 ... View the full answer

Income Tax Fundamentals 2013

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