Calculate the price of $1000 nominal of the bond using spot rates Calculate the current yield 3.Would you expect the yield-to-maturity of the bond to be greater, less than or equal to current yield rate? In a single sentence, explain your answer 4.Calculate the annualised forward rate, starting in 18 months, for a period of 6 months
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:
- Calculate the price of $1000 nominal of the bond using spot rates
- Calculate the current yield
3.Would you expect the yield-to-maturity of the bond to be greater, less than or equal to current yield rate? In a single sentence, explain your answer
4.Calculate the annualised forward rate, starting in 18 months, for a period
of 6 months
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