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Assume that Sunny Berhad had issued a 7% bond that matures in six years. The bond has a required yield of 9%, and the coupon
Assume that Sunny Berhad had issued a 7% bond that matures in six years. The bond has a required yield of 9%, and the coupon is paid semi-annually. Required: Calculate the following: (i) The bond price per RM100 of par value; (5 marks) (ii) The dollar convexity measure of the bond in years; (12 marks) (iii) The approximate duration of the bond using the shortcut formula by changing the yield by 20 basis points. (8 marks)
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