b) You are a fixed-income portfolio manager in an investment company. Currently, you are analysing the impact of changing interest rates on the following bond: : Cagamas Bond : RM100 : 5 years : 5% payable annually : 7% per annum : RM91.80 Name Par Value Maturity Coupon Yield-to-Maturity Price

Q: How the bond convexity affects the accuracy of the firs order approximation method? What are the…

A: Convexity is a risk-management technique that may be used to assess and manage a portfolio's…

Q: Define duration (bond)

A: Bond duration: It is defined as the sensitive interest rate to the time of repayment of the…

Q: Using an appropriate diagram, discuss to which extent duration measure of a bond is related to its…

A: Duration and convexity are two tools used to manage the risk exposure of fixed-income investments.…

Q: Explain bonds issue between interest dates with examples.

A: Bonds are typically issued at interest dates in order to smoothen the flow of interest and…

Q: Explain the bond theorems discussed in class witNrespect to time and coupon.

A: bond: it is a debt instrument issued by the firm to raise capital.

Q: characteristics of bonds  -terminology of bonds  -types of bonds?

A: BONDS Meaning- Bonds are investment securities where an investor invest money in a company or to a…

Q: Describe a bond and its characteristics.

A: Bond is a long-term debt instrument. A bond may be secured or unsecured. Bonds are issued by…

Q: Define Puttable bond.

A: Puttable bond: A puttable bond is a kind of bond that offers the right to the bond holder, but not…

Q: Define seasoned bond

A: A seasoned equity offering often termed as a secondary equity offering refers to a new equity…

Q: How do I determine the duration of a bond

A: It is an object used in bond valuation to determine the sensitivity of the bond. High duration comes…

Q: Define Callable bond.

A: Bonds are debt instruments that are issued for raising loan. Bonds include periodic interest…

Q: Define the  Bond Indenture.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What is the carrying amount of a bond?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: the formula for obtaining the gross yield on a bond.

A: Bond is the debt instrument issued by the borrowers to raise funds from various investors. Generally…

Q: How much is the carrying amount/initial recognition of the bond for each of the below…

A: Given in the question: Face Value of Bond = 2,000,000 Life = 5 Years Coupon Rate = 10% Ongoing…

Q: What are callable and puttable bonds? Explain in single sentence please.

A: Callable bonds are the bonds which can be redeemed anytime at the option of the issuer before its…

Q: xplain the calculation to find value of the bonds

A: The value of bond is the present value of coupon payment and present value of par value of bond…

Q: Explain why bonds are issued and identify the types of bonds?

A: Bonds are one method for corporations to generate funds. The investor undertakes to contribute the…

Q: Define the following Bond related terms: Issue Date Face Amount Term Contract Rate Payment Frequency…

A: Bonds refers to the security issued by corporate companies or government as and when they need to…

Q: Is it possible that a bond is reported in multiple places on the balance sheet? If yes, explain.

A: In finance, a bond is an instrument or document of indebtedness of the bond issuer to the holders.…

Q: Explain the three fundamental criteria that separate bonds, evaluate the benefits and drawbacks of…

A: Corporate bonds are financial instruments that are offered to investors in exchange for preset…

Q: What are the four main types of bonds?

A: The four main types of bonds are discussed as follows: Fixed-Rate bonds – In this type of bond, the…

Q: A bond provides information about its par value, coupon interest rate, and maturity date. Define…

A: Bond value: Current bond price is the present value of the future payments. Future payments include…

Q: Identify the term being referred to: A type of bond that requires a portion of the face amount be…

A: The type of bond that pays off a portion of face value periodically includes a proportionate payment…

Q: What is the difference between D uration and Convexity of a bond?

A: Duration measures the bond's sensitivity to interest rate changes. Convexity relates to the…

Q: What cause shifts for supply of bonds? Explain by the help of graphs

A: The bond supply curve depicts the relationship between the quantity of bonds and their prices. All…

Q: Show ful calculation for Bond A and Bond B

A: Price of the bond is the PV of all future coupons and par value discounted at the YTM or yield. The…

Q: Can someone explain in simpler detail than my text book- bond valuation? Specifically how to set up…

A: A bond is a type of debt instrument that provides a steady income stream to the borrower in the form…

Q: Bonds have several unique terms and features. Required: BRIEFLY describe or provide example(s) of…

A: Bonds are reflective of fixed income securities which will offer with regular coupon rate and they…

Q: Write down an equation for the three main components of the nominal long term interest rate on a…

A: These components reflect the various factors influencing the overall interest rate on a bond.

Q: Explain rating (bond)

A: Bond: Bond is a kind of debt instrument typically issued by corporations, government organizations…

Q: Explain the meaning of duration of a bond. Critically discuss the duration rules of bonds

A: Meaning: Duration is the measure of the price change with respect to change in the interest rate. In…

Q: Two interest rates are associated with pricing a bond.  Name and describe each.  How are they used ?

A: A bond is a debt instrument with which a shareholder credits cash to an entity, which can be a…