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Consider the following information of MMHE Bond. Face value RM1000 Maturity 10 YEARS Coupon rate 7.50% per annum Compounding (m) Annually a) Assuming annual interest

Consider the following information of MMHE Bond.

Face value RM1000

Maturity 10 YEARS

Coupon rate 7.50% per annum

Compounding (m) Annually

a) Assuming annual interest rate is 6.00% on the bond, calculate the value of the bond.

b) Illustrate the discounting cash flows using the Macaulay Duration Schedule.

c) Compute i. Modified duration. ii. Convexity

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