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QUESTION TWO A corporate bond was quoted at 95/= but its face value was Kshs. 100. Its coupon was 6% per annum. Its tenure was

QUESTION TWO

A corporate bond was quoted at 95/= but its face value was Kshs. 100. Its coupon was 6% per annum. Its tenure was 3 years.

Establish and explain the value of the bond

Suggest optimal pricing of this bond

Explain the concept bond stripping as applied in trade

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