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Assume the following information of a R1 000 par value bond: Coupon rate 8% with semi-annual payments Time to maturity 10 years Discount rate 10%

Assume the following information of a R1 000 par value bond: Coupon rate 8% with semi-annual payments Time to maturity 10 years Discount rate 10% 4.1.1 Calculate the value of the bond. (4) 4.1.2 What is the value of the bond if the discount rate fell to 6%? (4) 4.1.3 What can be concluded between price and yield from the calculations in questions (4.1.1) and (4.1.2) (2) 4.2 Ben Grahams portfolio has the following data for a particular sample period. Data for Bens portfolio for a particular sample period Portfolio Market T-Bill (Risk-free) Average return 35% 28% 6% Beta 1.20 1.00 0 Standard deviation 42% 30% 0 Calculate Sharpe, Jensen (alpha) and Treynor measures of performance for Bens portfolio and the market and indicate the measures by which Bens portfolio outperformed the market. (10) .Subject is Investment

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