Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Illustration
Discount bond (5 yr. bond with 10% coupon) (expected rate yield at 12%)
Premium bond (expected yield at 7.8%)
5
92.6
109.0
4
93.8
107.4
3
95.1
105.8
2
96.5
104.0
1
98.2
102.0
0
100.0
Reasons for price changes of a bond:
Change in the yield requirement of the issuer due to changes in the quality of credit of the issuer.
Change in the price as the bond approaches maturity in case of premium or discount bond.
Change in the price because of change in the yields of comparable bonds/securities.
While computing the bond pricing, the following assumptions are made:
Cash flows are known.
Coupon payment annually/semi-annually is made at exact period.
Required yield can be estimated.
One rate is used to discount all cash flows, i.e., with required yield rate.
The following cash factors are to be considered:
For callable bonds, cash flows cannot be certain. The investment decisions of the issuer depend on interest rate movements and other factors.
It is not possible to determine the appropriate yields and it need not be a single rate for all the future cash flows.
Describe the difference between a parallel loan and a back-to-back loan. Answer: A parallel loan contains four parties. One MNC (multinational company) borrows and re-lends to
Step 1) Opportunity Set Graph:Combine 2 of your stocks (Ignore the other 2 stocksfor this step only). Construct an investment opportunity set (the curved set) between the two risk
Task I am sure you are aware that the corporate annual meeting is coming up soon. As part of the Treasurer's presentation, I have been asked to propose a Special Capital Requi
Question 1: i) Performance budgeting is the best budgeting system. Discuss. ii) Why there is a need for implementing MTEF in the Mauritian Public Sector? Questi
What is the potential of having agency problems
What is Cost of Equity Capital? Describe please.
How would you describe the fact that China emerged as the second most significant recipient of FDI after the United States in recent years? Answer: China attracted a large deal o
Profitability Ratios Profit Margin It is a measure of the profit margin of the company. This is important to gauge the financial position of the company.
Q. Limitations of Traditional Approach in financial management? Limitations of Traditional Approach: - The traditional approach continued till mid 1950's. It has at the prese
Question #1: Review the Anthony’s Orchard case study in the unit resources. Consider the following assumptions: • The company, according to Anthony’s Orchard Strategic Plan, is h
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd