Question: In chapter 6, Bond Valuations techniques are introduced A bond is a debt security, like IOU. The bond issuers borrow from the Bond Investors. The

In chapter 6, Bond Valuations techniques are introduced

  • A bond is a debt security, like IOU.
  • The bond issuers borrow from the Bond Investors.
  • The issuers agree to repay the principal amount of the loan on the maturity date.
  • Thus, a bond represents loans from the holder to the issuer.

In this assignment, you are to discuss the following with numerical examples:

  1. What are the features of a zero-coupon bond?
  2. Explain the concept of Zero Coupon bond yields and its pricing behavior
  3. What are the features of a coupon bonds?

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