Work should be done in groups of two or three. Similar submissions will both get a mark of zero. The homework should be in
Work should be done in groups of two or three. Similar submissions will both get a mark of zero. The homework should be in an Excel form and to be submitted via Ritaj and file name format includes your names like this Diama_Abulaban_Iyad_Jabr.xlsx No other forms would be accepted. Assume you have a bond bought on 15th of April 2015, maturity date is 15th of April 2026, if the bond has semi annual coupon payments with 6% YTM and 8% Coupon rate, find the following: (5 marks) (2 marks) A. Find the PV of the bond B. Find the PV of the bond given it's a Zero-Coupon Bond. C. What is the bond's price elasticity if the required return changed to 8%? D. Calculate the duration of the bond. (3 marks) (3 marks) E. What is the percentage change in bond's price for an increase in yield for 0.3 percentage point. (1 mark) F. With a decrease in interest rates, would you prefer investing in coupon or zero coupon bonds and why? (1 mark)
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