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The Bank of Ghana issued a 3-year bond with a semi-annual coupon of 15.65%. The...

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Finance

The Bank of Ghana issued a 3-year bond with a semi-annual coupon of 15.65%. The BIVA Bank purchased GHS 40 million of the bonds when the current yield of the bond was 15% on the market.
a) Calculatethedurationofthebond.[20marks]
b) An analyst with The BIVA Bank forecasts that the interest rate will rise by 0.5% next month. What is the percentage change in the price of the bond? [6 marks]
c) What is the cedi change in the price of the bond? Calculate the new price of the bond on the market. [6 marks]
d) Outline four (4) limitations of gap analysis. [8 marks]

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