Financial Modelling

Answer for all questions please

nll 19161 QUESTION 2 [10 marks] An 11-year 7% pa. Treasury bond (coupon payable half-yearly) is available for purchase at a market yield to maturity of J2-6% pa. a. [5 marks] Find the bond's price (per $100 face value, rounded to three decimal places) at this yield. Include in your answer . a fully labelled cash flow diagram (drawn from the perspective of the bond issuer), . your chosen valuation date and . an equation of value. annual yield two hundred basis points higher. you know your answers in parts a and b are reasonable? b. [3 marks] Find the bond's price (to three decimal places) at a nominal c. 12 marks] Using the phrase par bond' answer the following: how do