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Question2 (3+4+3) a. A bond with 5 years to maturity and coupon payment is 9 percent, market price is Tk. 1025, and par value is Tk. 1000 and expected reinvestment rate of 7 percent. Calculate: I. Interest on Interest II. Total Return III. The realized compound yields for the bond and justify your findings based on reinvestment risk. b. Demonstrate security market line (SML) to depict the undervalued and overvalued stocks from your own portfolio (i.e. Investment course) and justify your stock selection decision. c. Briefly explain the implications of (P/E) ratio as stock picking rules of thumb and justify your stock selection risk using P/E ratio. Question2 (3+4+3) a. A bond with 5 years to maturity and coupon payment is 9 percent, market price is Tk. 1025, and par value is Tk. 1000 and expected reinvestment rate of 7 percent. Calculate: I. Interest on Interest II. Total Return III. The realized compound yields for the bond and justify your findings based on reinvestment risk. b. Demonstrate security market line (SML) to depict the undervalued and overvalued stocks from your own portfolio (i.e. Investment course) and justify your stock selection decision. c. Briefly explain the implications of (P/E) ratio as stock picking rules of thumb and justify your stock selection risk using P/E ratio

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