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Compute the macaulay duration

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Reference no: EM132979493

MY Company issued a bond at face value of P1,000 with a coupon rate of 8% per year but paid quarterly and will mature in 5 years at the market rate of 10%. Determine the following:

Problem a) What is the present value of the bond?

Problem b) Compute the Macaulay duration and modified duration of the bond.

Problem c) If the bond was sold after four years at the current price of P1,050 compute the Holding period rate.

Problem d) If the same bond was recalled after 3 years at P1,100, compute the yield to call rate if the current price of the bond at that time is P900.

Problem e) If the bond is held to maturity, and the present market price at maturity is P950, what is the yield to maturity rate?

Reference no: EM132979493

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