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Megat is considering investing in either two outstanding bonds. Bond A pays interest semi - annually and bond B pays interest quarterly. The current selling
Megat is considering investing in either two outstanding bonds.
Bond A pays interest semiannually and bond pays interest quarterly.
The current selling price for bond is RM and bond is RM
respectively. The information is shown in the following table:
Based on information above, calculate:
i Value of bond A and B Is the bond selling at premium or
discount, and why?
marks
A : RM
B : RM
ii Yield to Maturity YTM for bond A and Current Yield CY for
bond
marks
iii. If Megat has RM par value of bond with a coupon rate of
percent paid semiannually. The bond has years maturity
period and currently trade at RM with ten years remaining
to its first call and the call price is at RM Calculate the
yield to call for the bonds.
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