Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › GNT Dec 11
- This topic has 3 replies, 2 voices, and was last updated 9 years ago by John Moffat.
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- April 27, 2015 at 10:32 am #242906
Sir can you please explain in simple words what does this gross redemption yield mean. And how we will have clue that we should try 4%or 5% cant we try any random no like say 14,9 or anything.Or is it because we r taking the near coupon rate to the present one. Thanks
April 27, 2015 at 11:45 am #242920It is the overall return to the investor (a combination of the interest they are receiving and the gain or loss on repayment (as compared to the current market value)).
As a starting point best is to divide the coupon rate by the market value, and then make your two guesses and calculate the IRR. Any two sensible guesses will do.
April 27, 2015 at 1:21 pm #242932Thank you sir its meaning us clear now. In this question part (a) could u please show me how to do.Why is the examiner taking 60 while trying from 5%n 4%, can u please show me this in way of IRR. Thanks
April 27, 2015 at 5:08 pm #242953Sorry but I cannot find a question called GNT in the December 2011 exam.
Can you check again please.
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