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]