Question: can someone help completing this without using excel or any software pleasee? Question 1 A 5-year government bond valued at 1,000 is purchase when the
can someone help completing this without using excel or any software pleasee?
Question 1 A 5-year government bond valued at 1,000 is purchase when the market rate of interest is 8%. a) Calculate the annual repayment (value of the coupon) made to the investor at the end of year? (5 marks) b) Calculate the NPV of the agreed cash flow when interest rates change immediately to each of the following (the original 8% is included for comparison) 6.5%, 7.5%, 9%. (10 marks) c) Calculate the present value of the bond which is due to be repaid at the end of the 5-year lifetime. (5 marks) d) Comment on: (1) The relationship between interest rates and the attractiveness of bonds as an investment. (5marks)
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