Determine the duration of bond at part above

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Answer the following :-

a) Calculate the initial issue price of a 5-year, RMI,000 par value zero coupon bond at a market yield of 6%. Assume the interest is compounded semiannually.

b) Determine the duration of bond at part (a) above.

c) Assuming that you have purchased the bond in part (a) above and sold it 12 months Jater when it was selling at 12%, calculate your net gain or loss.

d) Identify under what situation will a bond sold at a discount of premium

Reference no: EM132607744

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