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1 ) An investor is considering the purchase of a 5 - year 1 6 % coupon bond. Coupon is payable at the end of

1) An investor is considering the purchase of a 5-year 16% coupon bond. Coupon is payable at the end of each year. The redemption value of the bond is at par of Rs 5000. If the investor wants a yield of 17%, what is the price at which he should be willing to buy the bond? (3 marks)2) A company has a Rs.100 par value bond currently selling at Rs.96.017. The coupon rate is 8% and maturity period is 22 years. If the bond makes semi-annual payments, what is its yield to maturity? (3 marks)3) Bajaj Ltd. issues a bond having face value of Rs.1000 and a coupon rate of 12%. Interest is paid semi-annually and the bond is redeemable at face value after 5 years. What is the intrinsic value of the bond if the required rate of return is 14%?(2.5 marks)4) A 8-year bond is issued with a face value of INR 500, paying interest of INR 50 a year. If interest rates increase shortly after the bond is issued, what happens to the bonds (1.5 marks)a) Coupon rate?b) Price?c) Yield to maturity?

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