You have just attended a conference on bond investment and you have been told that the current

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Question:

You have just attended a conference on bond investment and you have been told that the current AAA

bond yield is 10%. In your portfolio, there is only one AAA bond issued by One Tune Corporation

which is a RM1,000 par, 16% semi-annual payment bond with 2 years to maturity.

Required:

(a) Calculate the duration of the One Tune Corporation bond. (15 marks)

(b) Calculate the modified duration of the One Tune Corporation bond based on your answer in

part (a) above. (2 marks)

calculating duration? Which is the more widely used method? (3 marks)

[Total: 20 marks]

Related Book For answer-question

Accounting Information System

ISBN: 9781439078570

7th Edition

Authors: James A. Hall

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Posted Date: Feb 16, 2024 05:29 AM

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You have just attended a conference on bond investment and you have been told that the current

Question:

Expert Answer:

Bond Duration Analysis for One Tune Corporation Bond a Calculating Duration There are two common methods for calculating bond duration Macaulay durati... View the full answer

Accounting Information System

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