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Q4. a. What is the effect on the value of a bond due to a fall in bond rating from AAA to CC? (8 m)
Q4. a. What is the effect on the value of a bond due to a fall in bond rating from AAA to CC? (8 m) b. Why is calculating the yield-to-maturity of a bond like finding the internal rate of return (IRR) of an investment? (8 m) (9 m) c. Explain the following bond terminology: i. Sinking fund provision ii. Zero-coupon bond
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