Question: A Rs. 100 par value bond bears a coupon rate of 14% and matures after 5 years. Interest in payable semi-annually. Compute the value of

A Rs. 100 par value bond bears a coupon rate of 14% and matures after 5 years. Interest in payable semi-annually. Compute the value of the bond if the required rate of return is 16%. Also calculate the price change in the bond if yield decreases by 1%. (make necessary assumptions if required)

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