QUESTION 6: realtors. A Namibia government bond, GC25, has a par value of N$10,000 and a...
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QUESTION 6: realtors. A Namibia government bond, GC25, has a par value of N$10,000 and a coupon rate of 5% p.a. An investor bought the bond for N$11,400 at the beginning of 2021. The bond matures at the end of 2025 (a 5-year period) Required: a. Calculate flat yield and yield to maturity. (5 marks) b. Explain the weaknesses of flat yield as a metric for determining value of a bond, and use the example of the Namibia GC25 bond case above to support your explanation. (5 marks) c. Calculate the investor's yield to maturity (YTM) and compare it yield. d. Describe the relationship between bond market price and yield. with the flat (6 marks) (4 marks) [TOTAL: 20 MARKS] QUESTION 6: realtors. A Namibia government bond, GC25, has a par value of N$10,000 and a coupon rate of 5% p.a. An investor bought the bond for N$11,400 at the beginning of 2021. The bond matures at the end of 2025 (a 5-year period) Required: a. Calculate flat yield and yield to maturity. (5 marks) b. Explain the weaknesses of flat yield as a metric for determining value of a bond, and use the example of the Namibia GC25 bond case above to support your explanation. (5 marks) c. Calculate the investor's yield to maturity (YTM) and compare it yield. d. Describe the relationship between bond market price and yield. with the flat (6 marks) (4 marks) [TOTAL: 20 MARKS]
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Answer rating: 100% (QA)
Ans a To calculate the flat yield of the Namibia GC25 bond we need to first determine the bonds annual interest payment Since the bond has a par value ... View the full answer
Related Book For
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
Posted Date:
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