FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. The Bank of Ghana issued a 3-year bond with a semi-annual coupon of 16.65%. The BIVA Bank purchased GHS 50 million of the bonds

4. The Bank of Ghana issued a 3-year bond with a semi-annual coupon of 16.65%. The BIVA Bank purchased GHS 50 million of the bonds when the current yield of the bond was 15% on the market.
a) Calculate the duration of the bond. [20 marks]
b) An analyst with The BIVA Bank forecasts that the interest rate will rise by 0.5% next month. What is the percentage change in the price of the bond? [3 marks]
c) What is the cedi change in the price of the bond? Calculate the new price of the bond on the market.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Value Investing

Value Investing

Authors: Mike Hartley

1st Edition

979-8864443309

More Books

Students also viewed these Finance questions

Question

★★★★★
Obtain The Coca-Cola Company's 2010 annual report either using the ''Investor Relations'' portion of its website (do a web search for Coca-Cola investor relations) or go to www.sec.gov and click...

Answered: 1 week ago

Question

★★★★★
The center of an ellipse is (1, 6). One focus of the ellipse is ( 1 , 6). One vertex of the ellipse is (6, 6). What is the equation of the ellipse in standard form

Answered: 1 week ago

Question

★★★★★
65. Cosa Nostra Collectors, Inc. runs a debt collection service. All employees of Cosa are instructed that they should never use violence, or even threats of violence, in attempting to collect a...

Answered: 1 week ago

Question

★★★★★
When one company buys another company, it is not unusual that some workers are terminated. The severance benefits offered to the laid-off workers are often the subject of dispute. Suppose that the...

Answered: 1 week ago

Question

★★★★★
4. The Bank of Ghana issued a 3-year bond with a semi-annual coupon of 16.65%. The BIVA Bank purchased GHS 50 million of the bonds when the current yield of the bond was 15% on the market. a)...

Answered: 1 week ago

Question

★★★★★
A direct marketing channel typically involves a producer and a consumer. In contrast, an indirect channel is a channel that includes one or more intermediaries (distributor, broker, or agent)....

Answered: 1 week ago

Question

★★★★★
What are Electrophoresis?

Answered: 1 week ago

Question

★★★★★
Question : Which of the following statements best describes the concept of "interface segregation" in Java software design? A ) A class should implement as many interfaces as possible to maximize...

Answered: 1 week ago

Question

★★★★★
Question : In Java, what is the primary advantage of using the "builder pattern" when constructing complex objects? A ) It allows the creation of immutable objects effortlessly. B ) It provides a way...

Answered: 1 week ago

Question

★★★★★
Question : In Java, what is the main purpose of using the "template method pattern"? A ) To encapsulate the creation of objects in a centralized location. B ) To define the skeleton of an algorithm...

Answered: 1 week ago

Question

★★★★★
Question: What is the primary benefit of utilizing the "singleton pattern" in Java? A ) It allows multiple instances of a class to be created safely across different threads. B ) It restricts a class...

Answered: 1 week ago

Previous Question Next Question