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PART 1: CALCULATION QUESTIONS (10 marks) Direction: Answer the following question by using the required proforma and formulas. 1. A 5 year bond with 10
PART 1: CALCULATION QUESTIONS (10 marks) Direction: Answer the following question by using the required proforma and formulas.
1. A 5 year bond with 10 % coupon rate and BD 2000 Face value and has yield to maturity of 6 % . Assuming annual coupon payment. Calculate price of the bond Present value of the bond. Required: 1. Estimate the Cash Flow 2. Illustrate the time line of cash flow 3. Calculate the present value.
Additional reference: CP= CR X FV PV= FV/ (1 + r) n
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