Question: Bond, Stock Valuation and Foreign Exchanges You work in an investment firm that helps clients invest their money. A fintech company has come forward to

Bond, Stock Valuation and Foreign Exchanges You work in an investment firm that helps clients invest their money. A fintech company has come forward to raise funds for their expansion in the regional Southeast Asia markets. They specialise in lending to small and medium enterprises (SMEs). They are proposing to sell bonds or equity to you. Below are the terms:

Bond Price: $95 Par value: $100 Settlement date: 1 Jan 2023 Maturity date: 1 Jan 2031 Annual coupon rate: 6.0% Coupons: Semi-annual payment Day count basis: Actual/365 a) Compute the Yield to Maturity (YTM) for the bond.

(b) Using modified duration, estimate the price of bond if global interest rates were to rise by 0.5%. Assume YTM to rise by the same amount of global interest rates.

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