(b) Mr Jamal Abdollah plan to buy either one of this two bonds below. The information for both bonds are shown as follows: Bond Selling price Coupon rate Maturity years Yield to maturity (YTM) Payment Par value BULAN i. Value of bond RM980 8 percent 25 years 12 percent Semi-annually RM1,000 BINTANG RM1200 10 percent 30 years 15 percent Annually RM1,100 Based on the information given, calculate the following both bonds: ii. Yield to call (YTC) if both bonds were redeemed at a price of RM1,000 for Bulan and RM1,500 for Bintang respectively after 10 years. N

(b) Mr Jamal Abdollah plan to buy either one of this two bonds below. The information for both bonds are shown as follows: Bond Selling price Coupon rate Maturity years Yield to maturity (YTM) Payment Par value BULAN i. Value of bond RM980 8 percent 25 years 12 percent Semi-annually RM1,000 BINTANG RM1200 10 percent 30 years 15 percent Annually RM1,100 Based on the information given, calculate the following both bonds: ii. Yield to call (YTC) if both bonds were redeemed at a price of RM1,000 for Bulan and RM1,500 for Bintang respectively after 10 years. N

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Which will you prefer to invest your $1,50O: a) a two year bond with interest rate of 9 percent or b) two one year bonds, Year 1, the bond will earn 8% and year 2 the second bond will earn 9%. Which bond will you buy?
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Referring to the table below is the information about three RM1000 par value bonds and each of which pays coupon semiannually. The required rate of return on each bond is 12%. Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value. Bond Coupon Rate (%) Maturity (years) 1 10 5 2 12 10 3 14 15
San Miguel Company's 18-year, $1,000 par value bonds pay 6.5 percent interest annually. The market price of the bond is $1,105, and your required rate of return is 8.5 percent. a. Compute the bond's expected rate of return. b. Determine the value of the bond to you given your required rate or return. c. Should you purchase the bond? Why or why not? (*You must show your calculation process as well.)
1. Below is information about three $10000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 14%. Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value. Bond Coupon Rate (%) Maturity (years) 1 8 5 2 14 10 3 16 15 2. Using the Interpolation Method to calculate the YTM for the below Bonds: > The par value $18000 > Coupon Rate 10% every year > Maturity period 10 years > Market Value of bond $21800
You are given the following information on two traded bonds making semi-annual coupon payments. Bond Face Value Coupon Maturity Price A $1,000 3% 12 years $850.10 B $1,000 10% 12 years $970.00 Calculate Yield to Maturity (YTM) for bonds A and B.
Last Part of Question D and question E please
Q1) a) On 1st January 2021 and RBI is considering to issue a new 3-yrs G-Sec bond (semi- annual coupon paying bond) through an auction for a notified amount of Rs. 3000 crs. as a part of the borrowing programme. Let the name of the bond be Bond X. Below are the yields obtained in Auction. Find the coupon rate of the newly issued bond. b) What would be the price of the bond? Bid Yield Bid Amount (Crs) Sl no 1 4.70% 600 2 5.05% 300 3 4.85% 400 4 5.15% 500 5 4.77% 400 6 4.75% 700 7 5.12% 400 8 5.00% 300 9 4.92% 200 10 4.95% 400 (3+2=5) c) Exactly after one year (1 yr), that is on 1st January 2022, the following securities are getting traded in the market at NDS-OM. All the bonds are semi-annual coupon paying bonds. T-bills are the money market instruments. Symbol Secutity Name Maturity time ( yrs) Traded Price (Rs) A 182-Tbill 0.5 97.9317 B 364-Tbill 1 95.8823 C 6.17 GS 20XX 1.5 100.6900 D 6.84 GS 20XX 2 102.2950 E 7.16 GS 20XX 2.5 103.0800 Find the discount factors Z(0,t) from the above…
(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation) Fingen's 19-year, $1,000 par value bonds pay 12 percent interest annually. The market price of the bonds is $920 and the market's required yield to maturity on a comparable-risk bond is 15 percent. a. Compute the bond's yield to maturity b. Determine the value of the bond to you, given your required rate of return c. Should you purchase the bond? RCEDE a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? % (Round to two decimal places.)
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Three government bonds are in issue, bond A, bond B and bond C. each bond has a par value of K100 and is redeemable at the par value. The following additional information is available in respect of each bond: Bond Maturity term Annual coupon rate Price Bond A 1 year 5% K101.25 Bond B 2 years 6% K103.50 Bond C 3 years 7% K104.25 By bootstrapping the above coupon paying bonds, estimate the one year, two year and three year spot rates and state the shape of the resulting spot yield curve.
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