ABC bank purchased Bank of Ghana bond which pays an annual annual coupon of 25% with the face value of GHS 10m.

Calculate its price if the current yield on the same 2-year bond is 16%.  


(b) XYZ bank purchased Bank of Ghana bond that pays annual coupon of 19% in January 2010. The face value of the bond is GHS 5m.
What is the duration of this bond if the yield to maturity on the bond is 15%?

Answer rating: 100% (QA)

a To calculate the price of the Bank of Ghana bond purchased by ABC bank we need to use the formula ... View the full answer