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5. En. Abmalek has invested a bond in Taiwan and a share in Japan. As an international financial management student assist him to calculate the
5. En. Abmalek has invested a bond in Taiwan and a share in Japan. As an international financial management student assist him to calculate the return for the financial securities. (a) En. Abmalek buys a Taiwanese bond with a face value of NT20, 000, which is priced at NT$19,500 and bears a coupon of NT$1,700. At the end of the year, the investor sells the bond at a price of NT$18,030. During the year, the exchange rate goes from NT$1 = U.S.$0.0375 to NT$1 = U.S.$0.0425. (10 marks) ( (b) En. Abmalek buys a share of Sony at a price of 38,720 at the start of the year. During the year, the investor receives a dividend of 500. At the end of the year, the price of Sony is 49,560. During the year, the exchange rate decrease 14.28%. (10 marks)
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