QUESTION 3
1 answer:
The values of bond 1 and bond 2 based on the information will be RM7892.93 and RM10000 respectively.
<h3>How to illustrate the information?</h3>The price of Bond 1 = RM7,892.93, Bond is selling at a discount because the bond price is less than the Par value
Price of Bond 2 = RM10,000, Bond is selling at par, because the bond price is equal to the par value
Price of bond 3 = RM11,240.90 Bond is selling at a premium because the bond price is more than the par value
The yield to maturity (YTM) is the estimated rate of return. The yield to maturity assumes that the buyer of the bond will hold the bond until its maturity date, and will then reinvest each interest payment at the same interest rate. Therefore, the yield to maturity includes the coupon rate that's within its calculation. The yield to maturity is also known as the redemption yield.
The YTM will be:
= [1800 + (18000 - 21800)/10] / [(18000 + 21800)/2]
= (1800 - 380)/19900
= 1420/19900
= 7.14%
Therefore the values of bond 1 and bond 2 based on the information will be RM7892.93 and RM10000 respectively and the YTM is 7.14%
Learn more about bonds on:
#SPJ1
You might be interested in
Answer: The percentage of respondents said that the gas prices are“Not at all annoying” are 12.57%
Explanation: There are 1018 respondents out of which 128 respondents said that the gas prices are “Not at all annoying”
Where, Number of respondents “Not at all annoying” = 128
Total Number of respondents = 1018
Percentage of the respondents = 128 ÷ 1018 * 100
Percentage of the respondents = 0.1257367 *100
Therefore, the percentage of respondents who said is not annoying is 12.57%.