alleryStart learning →A 2-year bond, face Rs 100, pays 8% coupon half-yearly. The yield is 5% per half-year. The value is closest to?
ARs 100.00
BRs 103.55
CRs 92.10
DRs 96.45
Answer & Solution
Correct answer: D. Rs 96.45
Four coupons of Rs 4 at 5% per period are worth about 14.18, and Rs 100 after 4 periods is worth about 82.27, giving about Rs 96.45.
Keep practising Bond Valuation
Browse all Bond Valuation questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
The price-yield relation of a bond is described as what?For a discount bond, how does YTM compare with current yield?On a bond sold at a clean quote, what does the buyer pay at settlement?After a coupon is paid, how does a bond's dirty price behave?A 6% par-100 bond pays on 1 Apr and 1 Oct. On 1 Jul clean price is 98.20. Under 30/360 theHow does the term-structure approach discount a bond's cash flows?In the DDM, the dividend growth rate serves as a proxy for what?Which preferred stock carries an embedded option to swap into another security?