A RM2,000 bond with 8% convertible semi-annually coupon matures at par on 15th October 2025. The bond was purchased on 28th June 2009 which yield at 9% convertible semi-annually. Determine the purchase price of the bond? Assume simple interest between bond coupon dates and note that: Date Day of the year 15 April 105 28 June 179 15 October 288
A RM2,000 bond with 8% convertible semi-annually coupon matures at par on 15th October 2025. The bond was purchased on 28th June 2009 which yield at 9% convertible semi-annually. Determine the purchase price of the bond? Assume simple interest between bond coupon dates and note that: Date Day of the year 15 April 105 28 June 179 15 October 288
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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a) A RM2,000 bond with 8% convertible semi-annually coupon matures at par on 15th October 2025. The bond was purchased on 28th June 2009 which yield at 9% convertible semi-annually.
Determine the purchase price of the bond?
Assume simple interest between bond coupon dates and note that:
| Date | Day of the year |
| 15 April | 105 |
| 28 June | 179 |
| 15 October | 288 |
b) A RM2,000 par value 15-year bond with coupons at 10% payable semi-annually will be redeemed at RM2,500. The bond is bought to yield 12% convertible semi-annually.
Find the price of this bond by using:
i) Premium/discount formula
ii) Makeham formula
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