Question
Consider the following information of Petronas Bond Description Petronas Bond Face value RM 1000 Maturity 5 YEARS Coupon rate 9.00% per annum Compounding (m) Semiannually
Consider the following information of Petronas Bond
| Description | Petronas Bond |
| Face value | RM 1000 |
| Maturity | 5 YEARS |
| Coupon rate | 9.00% per annum |
| Compounding (m) | Semiannually |
a) Assuming annual interest rate is 6.00% on the bond, calculate the value of the bond. (5 marks) b) Illustrate the discounting cash flows using the Macaulay Duration Schedule. (15 Marks)
c) Compute
i. Modified duration. (5 Marks) ii. Convexity(10 Marks) -
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Production And Operations Analytics
Authors: Steven Nahmias, Tava Lennon Olsen
8th Edition
1478639261, 9781478639268
