Question: Subject Investment SECTION B [60] This section is compulsory: Answer ALL the questions from this section QUESTION FOUR [20] 4.1 Assume the following information of

Subject Investment SECTION B [60] This section is compulsory: Answer ALL

Subject Investment

SECTION B [60] This section is compulsory: Answer ALL the questions from this section QUESTION FOUR [20] 4.1 Assume the following information of a R1 000 par value bond: Coupon rate 8% with semi-annual payments Time to maturity 10 years Discount rate 10% 4.1.1 Calculate the value of the bond. (4) 4.1.2 What (4) the value of the bond if the discount rate fell to 6%? 4.1.3 What can be concluded between price and yield from the calculations in questions (4.1.1) and (4.1.2) (2) Words: 2/614 English (UK) X W EN

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