Question 1 40 Marks a) What is meant when a bond is said to be trading cum-interest? Marks b) A municipality Bond has face value of $1000, fixed coupon rate of 20% yield to maturity of 25% and maturity date of June 1 2020. It pays coupons bi-annually on June 1 and December 1 i. Calculate the Dirty and Clean Price if settlement date is April 15 2015 (cum interest). 10 marks] yield to maturity rises to 27% and remains at this level to horizon date of June 1 i. What is the realized yield if soon after purchasing the bond on April 15 2015, the 2017? [8 Marksl ili. What other factors besides the fall in interest rates may cause realized return of a Bond investment to differ from the promised yield to maturity? 6 Marks] iv. Calculate the Duration of the Bond in years. marks c) Given the following table for the sport rate and the time to maturity (TTM) for Bonds on the market Question 1 40 Marks a) What is meant when a bond is said to be trading cum-interest? Marks b) A municipality Bond has face value of $1000, fixed coupon rate of 20% yield to maturity of 25% and maturity date of June 1 2020. It pays coupons bi-annually on June 1 and December 1 i. Calculate the Dirty and Clean Price if settlement date is April 15 2015 (cum interest). 10 marks] yield to maturity rises to 27% and remains at this level to horizon date of June 1 i. What is the realized yield if soon after purchasing the bond on April 15 2015, the 2017? [8 Marksl ili. What other factors besides the fall in interest rates may cause realized return of a Bond investment to differ from the promised yield to maturity? 6 Marks] iv. Calculate the Duration of the Bond in years. marks c) Given the following table for the sport rate and the time to maturity (TTM) for Bonds on the market