3. On 12/04/01 a fixed-coupon bond has the following features: - Face value: Rs1000 - Annual coupon...
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Question:
3. On 12/04/01 a fixed-coupon bond has the following features:
- Face value: Rs1000
- Annual coupon rate: 8%
- Coupon frequency: semi-annual
- Maturity: 05/06/04
- Annual YTM: 7%
Assume 1 month = 30 days,
a) Illustrate the future cash flows that will be delivered by this bond. [2 marks]
b) Calculate the dirty price of the bond. [4 marks]
c) Compute the accrued interest. [2 marks]
d) Find the accrued interest if the actual date is 20/06/02 instead of 12/04/01.
[2 marks]
e) If the dirty price on 05/09/02 is equal to Rs988.36; what is the annual Yield To Maturity
(YTM)? [6 marks]
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