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= You are considering the purchase of a 5-year bond, with semi-annual coupons at the rate of 10% per annum and a par value of
= You are considering the purchase of a 5-year bond, with semi-annual coupons at the rate of 10% per annum and a par value of RM1,000.00. The bond yields 8% convertible semi-annually. (a) Calculate the price of the bond. (3 marks) (b) Construct the bond amortization schedule consists of the following details: Payment No., Payment Amount, Bond Interest Expense, Discount Amortization, Unamortized Discount, Carrying Value of Bond. (6 marks) (c) Construct a table to show the bond price sensitivity with rows of Yield to Maturity, y 4%, 5%, ...,11%, 12% and columns of Term to Maturity, T = 1, 2, 3, ..., 10 years. (4 marks) (d) Calculate the bond's (i) modified duration. (4 marks) (ii) convexity measure. (4 marks) () Based on part (d), approximate and interpret the percentage price change if the yield rate alters to 8.5% per annum. =
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