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1. Beatrice wants to buy one of the bonds below. Calculate the price she would have to pay. Assume both bonds pay interest semi-annually and
1. Beatrice wants to buy one of the bonds below. Calculate the price she would have to pay. Assume both bonds pay interest semi-annually and comparable bonds yield 7%. Please show all calculations and calculate to 2 decimal places. (5 marks) Bond Price? Maturity Coupon Rate 10,000 ABC 5.0% 5 years 10,000 DEF 15.0% 10 years us 2. Recalculate the price of each bond if current increase rates increase by 2 percentage points. (5 marks) Bond Price? Maturity Coupon Rate 110.000 ABC 15.0% 5 years 10.000 DEF 15.0% 10 years 3. Explain the impact of the increase in interest rates on the price of each bond. (4 marks) Activate Wind Go to Setdags to 4. Name and explain, providing an example for each, 3 risk factors that affect the required return on a corporate bond. (6 marks)
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