Q1. Consider the following par bond (ie coupon rate=yield): Year: 10 and 20 years . Yld 1.50% and 2.0% Q1c. if you hold the 20Y for 1 year, what is your total return from the investment assuming yld curve does not change ? Hint: your total return comes from coupon collection as well as price appreciation or depreciation
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:
Q1. Consider the following par bond (ie coupon rate=yield):
Year: 10 and 20 years . Yld 1.50% and 2.0%
Q1c. if you hold the 20Y for 1 year, what is your total
curve does not change ?
Hint: your total return comes from coupon collection as well as price appreciation or
depreciation
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