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    Assignment # 2 Fall-2020: Teacher's Message

    Uploaded by

    Abdussalam gill
    This document provides instructions for Assignment #2 for the FIN630 course. It is due on February 02, 2021 and is worth 10 marks. The assignment aims to enhance students' knowledge of calculating bond prices and understanding how the price is affected by interest rates. Students are advised to carefully read the question, show all work, and submit their answers in MS Word format before the due date. Late submissions will not be accepted.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Assignment # 2 Fall-2020: Teacher's Message

    Uploaded by

    Abdussalam gill
    18 views3 pages
    This document provides instructions for Assignment #2 for the FIN630 course. It is due on February 02, 2021 and is worth 10 marks. The assignment aims to enhance students' knowledge of calculating bond prices and understanding how the price is affected by interest rates. Students are advised to carefully read the question, show all work, and submit their answers in MS Word format before the due date. Late submissions will not be accepted.

    Original Description:

    Fin630

    Original Title

    Fall 2020_FIN630_2

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    This document provides instructions for Assignment #2 for the FIN630 course. It is due on February 02, 2021 and is worth 10 marks. The assignment aims to enhance students' knowledge of calculating bond prices and understanding how the price is affected by interest rates. Students are advised to carefully read the question, show all work, and submit their answers in MS Word format before the due date. Late submissions will not be accepted.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    18 views3 pages

    Assignment # 2 Fall-2020: Teacher's Message

    Uploaded by

    Abdussalam gill
    This document provides instructions for Assignment #2 for the FIN630 course. It is due on February 02, 2021 and is worth 10 marks. The assignment aims to enhance students' knowledge of calculating bond prices and understanding how the price is affected by interest rates. Students are advised to carefully read the question, show all work, and submit their answers in MS Word format before the due date. Late submissions will not be accepted.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Assignment # 2

    Fall-2020

    Due Date: February 02, 2021 MARKS: 10

    Teacher’s Message:

    Dear Student,

    Here is your Assignment for the course of FIN630. It will provide you an opportunity to get
    yourself prepared for your final-term exam. Before comprehending and attempting the assignment,
    we would like you to note some of the following important points:
     This assignment has been designed to enhance your knowledge so it is advisable to put your
    genuine efforts towards its attempt. Carefully watch relevant lectures and consult the
    relevant material from handouts along with recommended books. You may, however,
    consult multiple study resources but the solution should be prepared wholly and solely by
    you.
     Always remember that copied/cheated solutions not only earn you zero marks but also spoil
    your knowledge. So, keep yourself at a safe distance from ready-made and substandard
    solutions.
     Read the assignment requirements carefully and follow the provided guidelines in their true
    letter and spirit. Believe it that you are capable enough to do it by yourself so just give it a try.
     Before starting your attempt, you are also advised to read the solution guidelines and all other
    instructions provided at the end of the assignment.

    Happy Learning!!!

    LEARNING OBJECTIVES:

    After attempting this assignment, the students would be able to:


     calculate the Value/Price of Bond
     evaluate the effect of decrease in the required rate of return/interest rate on the price/value
    of bond
    Question:

    Bond is the medium of fixed income which is used by most of the industries in order to raise their
    capital. The price of bond varies due to the several factors. Lohay Industries issued two bonds at
    two different required rates of return or interest rates. Following are the details of these two bonds

    Bond A:
    Bond A has a face value of Rs. 1000 with a coupon rate of 8% and the maturity of 5 years. Coupon
    payments are made annually and the required rate of return of this bond is 10% annually.

    Bond B:
    Bond B has a face value of Rs. 1000 with a coupon rate of 8% and the maturity of 5 years. Coupon
    payments are made annually and the required rate of return of this bond is 7% annually.

    Requirements:
    1. Calculate the Price/Value of Bond A (4 marks)
    2. Calculate the Price/Value of Bond B (4 marks)
    3. What will be the effect of decrease in the required rate of return on the price/value
    of the bond? (2 marks)

    NOTE: You are required to provide complete calculations and working with each and every step.
    Please read the following instructions carefully before preparing the assignment solution:
     Copy or reproduction of material is strictly prohibited. You may consult multiple sources for
    knowledge and understanding but the assignment should be composed in your own words.
     Your attempt must be to-the-point and according to the requirement.
     Put your genuine efforts in order to understand the concepts thoroughly.
     Provide complete working or calculations in each case otherwise you will lose marks.
     Irrelevant details are not required

    24 hours extra/grace period after the due date is usually available to overcome uploading
    difficulties. This extra time should only be used to meet the emergencies and above mentioned due
    dates should always be treated as final to avoid any inconvenience.

    DEADLINE:

     Make sure to upload the solution file before the due date on VULMS.
     Any submission made via email after the due date will not be accepted.

    FORMATTING GUIDELINES:

     Use the font style “Times New Roman”, “Arial” or “Garamond” and font size “12”.
     It is advised to compose your document only in MS-Word format.
     You may also compose your assignment in Open Office format.
     Use black and blue font colors only.

    RULES FOR MARKING

    Please note that your assignment will be marked or marked as Zero (0), if:
     Plagiarism is found more than 20% because university is following Zero Tolerance
    Policy for plagiarism. In case of copied solution, plagiarism report will be attached with the
    assignment solution files in order to provide exact results of copied data.
     It is submitted after the due date.
     The uploaded solution file does not open or is corrupt.
     It is in any format other than MS-Word or Open Office e.g. Excel, PowerPoint, PDF etc.
     It is cheated or copied from other students, internet, books, journals etc.

    ------------------------< BEST OF LUCK >------------------------

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