Consider a bond portfolio consisting of €20 million in three-year maturity bonds, €10 million four-year maturity bonds and €15 million in five-year maturity bonds. The three-year bonds have a duration of 2.8 years, the four-year bonds have a duration of 3.6 years, and the five-year bonds have a duration of 4.5 years. If interest rates increase by 20 basis points, what will be the percentage change in the value of the nortfolio?

Q: A firm has issued a bond that has a coupon of 11%, semi-annual payments, a required return of 14%,…

A:

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A: Please see the next step for the solution

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A: 1. Price of shares can be calculated as : Results obtained :

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Q: Assume the government issues a semi- annual bond that matures in 5 years with a face value of $1,000…

A:

Q: onsider a bond with face value of $1000, a coupon rate of 8% (paid annually), and ten years to…

A: Price of bond is Present value of coupon and present value of par value of bond.

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A: Par Value = 5000 Time Period (N) = 10 years or 40 Quarters Quarterly Interest Rate Required Return…

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A: Bond yield =10% Duration = 7.194 Market yield Change by = 50 basis point

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A: Bonds are debt securities issued by Government or other companies, who seek to raise money from…

Q: Assume the government issues a semi-annual bond that matures in 5 years with a face value of $1,000…

A: Price = Coupon Amount * PVAF ( Semi annual YTM, Number of half years ) + Face value * PVIF ( Semi…

Q: Assume a $1,000 face value bond has a coupon rate of 9.5% paid semiannually and has an eight-year…

A: Excel Spreadsheet: Excel Workings:

Q: A federal government bond with a 16-year maturity and an annual coupon rate of 10% (coupons are paid…

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Q: rate of return of the bond? W

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Q: A 15-year Treasury bond is issued with face value of $1,000, paying interest of $58 per year. If…

A: The coupon rate can be calculated as:

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A: First, need to find out Yeild to Maturity  Solved using Financial Calculator  PV = -959 FV = 1000…

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A: “Since you have asked multiple questions, we will solve the one question for you. If you want any…

Q: Suppose that a bond has a face value of Php300,000 and its maturity date is 20 years from now. The…

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A: Number of semi annual periods = 40 Semi annual coupon payment = $19.03 Par value = $1000

Q: What should the current market price be for a bond with a $1,000 face value, a 10% coupon rate paid…

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A: "Since you asked multiple questions, we will answer the first question for you as per guidelines.…

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A: Given information: Face value : $1,000 Coupon rate : 5% Time to maturity : 15 Market rate : 4.5%

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Q: A bond that matures in eight years, has a coupon rate of 20% and has a maturity value of US$ 200.…

A: We require to calculate the present value of bond in this question. We can calculate the present…

Q: What will be the bonds’ new prices if market yields change immediately by ± 0.10 percent?

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Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like: