Q1 (a) Explain FOUR (4) reasons that influence the changes which make debt security yields vary. (b) If a government bond is expected to mature in two years and has a current price of RM950, calculate the bond's interest rate/yield if it has a par value of RM1,000 and a promised coupon payment rate of 10%. (c) From part (b) above, illustrate how the bond price/value if the interest rate/yield moves up (increase).

Q1 (a) Explain FOUR (4) reasons that influence the changes which make debt security yields vary. (b) If a government bond is expected to mature in two years and has a current price of RM950, calculate the bond's interest rate/yield if it has a par value of RM1,000 and a promised coupon payment rate of 10%. (c) From part (b) above, illustrate how the bond price/value if the interest rate/yield moves up (increase).

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 7PROB

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