Shiwali Garg
(CHARTERED ACCOUNTANT)
(413 Points)
Replied 09 May 2018
srinivasan
(CA Business)
(36 Points)
Replied 10 May 2018
bond sum was quite easy and solvable ..... the answer is that FV is Rs 1000.
Let X be the maturity value of bonds. Since the bonds are quoting at a discount yield that means the price of the bond today at 6% yield will be PV of X at 6% pa yield for 45 days ie
X x 1/(1+0.06*45/365) = 0.9927X.
Now they have given that if the yield increases by 200 bps ie to 8% the bond price will fall by Rs 2.5 i.e the new bond price at 8% yield will be 0.9927X - 2.5 ..................(A)
Further we know that at 8% yield the price of the bond will be PV of X at 8% yield pa for 45 days ie X x 1/(1+0.08*45/365) = 0.9902X ...................(B)
Equating (A) and (B) [Since both give the price of bond at 8% yield) and solving for X we get X = Rs.1000....... EASSSSSSSSY
srinivasan
(CA Business)
(36 Points)
Replied 10 May 2018
Bond question was really easy ...
It is given that the bond has 45 days to maturity and is presently quoting at a discount yield of 6%.
Let the maturity value be X.
Price of Bond today = PV of X @ 6% pa for 45 days =X* 1/(1+0.06*45/365) = 0.9927X.
Now, It is given that if the yield increases by 200 bps ie 8% the price of the bond falls by Rs. 2.50. Hence the price of bond at 8% yield will be = 0.9927X-2.50 ...............(A)
We also know that price of bond at 8% yield is nothing but the PV of X @ 8% pa for 45 days ie X * 1/(1+0.08*45/365) which gives us 0.9920X.........................................(B).
Since (A) and (B) both give the price of bond when the yield is 8% they must be equal.
Hence 0.9927X-2.50 = 0.9920X; Solving for X we get X = Rs 1000.
Eaaaaasssssyyyyy!!!
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
CAclubindia
