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Question 1 ( 1 1 marks ) On 1 April 2 0 2 4 , you've just purchased a 1 0 - year bond issued
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On April you've just purchased a year bond issued by MTR Corporation to finance the future railway development. The bond has a face value of $ and carries coupon, paid semiannually. The yield of the bond is APR compounded semiannually.
a How much did you pay to buy the bond on April
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b Is the bond a par bond, discount bond or premium bond? Explain.
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c On March the bond becomes a par bond as its yield has decreased from APR to APR compounded semiannually.
i What is the value of Explain.
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ii If you sell the bond immediately after receiving the second coupon, calculate the capital gain yield.
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