Shah obtained from bond investment

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CNC Bond has a coupon rate of 5%, with a 10-year maturity period and a par value of RM1,000 and pays coupon annually.

After 3 years, Shah decides to sell the bond and at the point of sale the yield is 8%. The yield during the investment period is 5%.

a. Provide a detail cash flow from the bond investment in the 3-year period.

b. Calculate the total realized return that Shah obtained from the bond investment.

c. Do you think Shah has made a good decision in selling the bond? Why? Explain in detail.

Reference no: EM133239457

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