QUESTION 1 (10 marks) Each of the following bonds has a $100 par value. Bond...
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QUESTION 1 (10 marks) Each of the following bonds has a $100 par value. Bond Coupon payment Years to maturity Coupon interest rate (% p.a.) 4.25 2.10 Yield to maturity (% p.a.) 3.50 3.50 15 Annual Semi-annual Y 15 a) Calculate the value of Bond X (2 marks) b) Calculate the value of Bond Y (3 marks) Which bond has the higher interest rate risk and why? (5 marks) O II + X * B28 # 4 5 & 7 6 8 9 ) 0 E R T Y U I O P D F G H J K L C
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