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question 2 please [30 marks) QUESTION TWO: (1) How is the value of a coupon bond calculated? (2) What is the value of a 9-year
question 2 please [30 marks) QUESTION TWO: (1) How is the value of a coupon bond calculated? (2) What is the value of a 9-year bond, Ishs 100.000 par value with a 10% annual coupon, if its required rate of return is 9%? (3) What is the value of the bond described in part (2) if it pas interest sermi-annually, other things being equal? (4) What is approximate YTM of a 6-year, Tshs 100,000 par value bond with a 10% annual coupon, if it sells for Tshs 116,000? 1(5) What is the yield to call (YT or HPY) of the bond duscribed in part (4) if the bond can be called after 3 years at a premium of Tshs 6,000? (6) What is the difference between interest rate risk and reinvestment risk? (7) What are yield curves and their 4 uses? [5 marks@7 = 35 marks]
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