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Express Deliveries Inc., a US based company has just issued a new bond. The bond has the following characteristics: Maturity: Coupon: Coupon Payments. Rating: 3

Express Deliveries Inc., a US based company has just issued a new bond. The bond has the following characteristics: Maturity: Coupon: Coupon Payments. Rating: 3 Years The price of the bond. The duration of the bond. Annual AA The corresponding US Government Bond has a yield of 4% and the spread between government bonds and AA rated corporate bonds is 50 basis points. Calculate: (8 Marks) (5 Marks) The price of the bond in eighteen months, assuming the yield curve remains constant

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