: ompute the current yield (CY) of the bond. ompute the capital gain/loss if the bond is sold after 3 years. o consists of securities as follows:
: ompute the current yield (CY) of the bond. ompute the capital gain/loss if the bond is sold after 3 years. o consists of securities as follows:
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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Transcribed Image Text:Advise on the changes to be made if you would like to rebalance your portfolio
according to the following weightings:
Security
A
Weighting
30
B
20
C
20
D
15
E
15
(111)
Assume that the capital market line is as follows:
4,00 + 13,56
Comment on whether each of the securities is overvalued or undervalued if returns of
the securities are as follows:
Security
Return
A
20
B
20
C
50
D
25
E
31
(c)
Outline THREE (3) assumptions of the Capital Asset Pricing Model.
Transcribed Image Text:A bond with 5% coupon and 3% yield to maturity (YTM) with par value of RM1,000 has 8
years to maturity.
(a)
Required:
(i)
Compute the current yield (CY) of the bond.
(ii)
Compute the capital gain/loss if the bond is sold after 3 years.
(b)
A portfolio consists of securities as follows:
Average buying
price (RM)
Security
Beta
Units
Current market
price (RM)
A
1.3
30,000
10,000
80,000
200,000
150,000
4.00
4.80
В
1.2
8.00
9.60
C
1.3
1.20
3.20
D
1.5
0.50
0.30
E
1.6
0.20
0.10
Required:
(i)
Calculate the profit/loss (in RM) for the portfolio above.
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