A Government bond pays a coupon rate of 2.75% and reaches maturity April 21, 2024. The coupon payment is paid semiannually on April 21 and October 21. The investor buys the bond on June 30, 2020 for price of $1,000. The discount rate is 0.305%. Calculate the dirty price, clean price,
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:
A Government bond pays a coupon rate of 2.75% and reaches maturity April 21, 2024. The coupon payment is paid semiannually on April 21 and October 21. The investor buys the bond on June 30, 2020 for price of $1,000. The discount rate is 0.305%.
Calculate the dirty price, clean price, modified duration and modified convexity of the bond
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