The following information is available in respect of Bond 1 and Bond 2 Bond 1 Bond 2 Face value, redeemable value at par 1000 1000 Coupon rate,…

CA Final · Advanced Financial Management · PYQS · November 2024
The following information is available in respect of Bond 1 and Bond 2 Bond 1 Bond 2 Face value, redeemable value at par 1000 1000 Coupon rate, payable annually (%) 6% 10% Time to maturity (years) 5 3 An investor has the portfolio consisting of 75% of Bond 1 and 25% of Bond 2. The current YTMs prevailing in the market is 10%. Year (n) : 1 2 3 4 5 PVIF (10%, n) : 0.9091 0.8264 0.7513 0.6830 0.6209 From the information given above, choose the correct answer to the question no. 7 to 10: (4 × 2 = 8 Marks)
(A) 870.12
(B) 902.36
(C) 1832.23
(D) 1864.45

Suggested Answer and Working Notes:

Correct Answer: Option (A)

870.12

Topics: Portfolio Management, Security Valuation

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