Question

you are evaluating two bounds name BOX flexi bond and COX safety bond. Coupon rates of both the bonds 10% and 12%. Maturity period 5 years for both the bonds. Face value of both the bonds is Rs.1000. Current market price of BOX flexi bond is Rs.964 and COX safety bond is Rs.850. Yeield to maturity rate or discount rate is 8% for both the bonds. You are required to calculate current yield and duration of the BOX and COX bonds.

please any one solve this problem in detail.. ​

Answer 1

Explanation:

The sum of the present value of coupon payments and principal is the market price of the bond. Market Price = $862.30 + $96.39 = $958.69. Since the market price is below the par value, the bond is trading at a discount of $1,000 - $958.69 = $41.31. The bond discount rate is, therefore, $41.31/$1,000 = 4.13%.

Answer 2

Answer:

The above answer is absolutely right dear.....