(b) Bluechip Company has TWO (2) bonds to evaluate and below are the information:- • Bond A has coupon rate of 10 percent and par value of RM1,000. The bond duration is 7 years with yield to maturity is 8 percent annually. • Bond B with coupon rate of 6 percent and yield to maturity is 10 percent. The maturity for bond is 5 years which paid semiannually. Evaluate the purchase price of both bonds and identify its relationship with the par value.

(b) Bluechip Company has TWO (2) bonds to evaluate and below are the information:- • Bond A has coupon rate of 10 percent and par value of RM1,000. The bond duration is 7 years with yield to maturity is 8 percent annually. • Bond B with coupon rate of 6 percent and yield to maturity is 10 percent. The maturity for bond is 5 years which paid semiannually. Evaluate the purchase price of both bonds and identify its relationship with the par value.

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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What is the bond, bond valuation, and interest rates of CVS in 2020?

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