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QUESTION 2 [35 MARKS] Consider the following information of Petronas Bond Description Petronas Bond Face value RM1,000 Maturity 5 Years Coupon rate 9.00% per annum

QUESTION 2 [35 MARKS] Consider the following information of Petronas Bond Description Petronas Bond Face value RM1,000 Maturity 5 Years Coupon rate 9.00% per annum Compounding (m) Semiannually a) Assuming annual interest rate is 6.00% on the bond, calculate the value of the bond. (5 marks) b) Illustrate the discounting cash flows using the Macaulay Duration Schedule. (15 Marks) c) Compute i. Modified duration. (5 Marks)

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