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0.65 (15 Marks) 9112 Question 3 scount Por ch a 2oyr a opage 3.1. What is a straight bond (5 marks) 3.2.A bond has a

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0.65 (15 Marks) 9112 Question 3 scount Por ch a 2oyr a opage 3.1. What is a straight bond (5 marks) 3.2.A bond has a face value of N$220,000 and matures in 30 years. The bond makes no Per month payments for the first 5 years, then pays N$720 per annum over the subsequent twenty years, and finally pays N$1,300 every year over the last 5 years. If the required return on this bond is 25% compounded annually: Required: Compute the current price of the above bond? (10 marks) 3

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