What will be each bond price

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Reference no: EM132525244

a) Consider the three bonds described here. BON AMAN BON DAMAI BON SENTOSA Maturity 10 year 10 year 20 year

Annual coupon rate

(payable semiannual)

6% 8% 6%

Par Value RM1, 000 RM1, 000 RM1, 000

i. If all three bonds a required of 8 %, what will be each bond's price?

ii. Which bonds are selling at a discount? At a premium? A par?

iii. If required returns on these bonds all rise to 10%, what are their new prices?

iv. If Bond AMAN were selling for RM1,100, what would be its yield to maturity and current yield?

b) Briefly explain the factors effecting bond's grades.

Reference no: EM132525244

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