Question
A Rs. 100 par value bond bears a coupon rate of 14% and matures after 5 years. Interest in payable semi-annually. Compute the value of
A Rs. 100 par value bond bears a coupon rate of 14% and matures after 5 years. Interest in payable semi-annually. Compute the value of the bond if the required rate of return is 16%. Also calculate the price change in the bond if yield decreases by 1%. (make necessary assumptions if required)
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Financial Markets And Institutions
Authors: Jeff Madura
8th Edition
0324568215, 978-0324568219
