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a https://www.accaglobal.com/content/dam/ACCA_Global/Students/prof/p4/Exam%20docs/mj17_hybrid_p4_a.pdf
calculation 4 (a)
i didnt understand how yield of bond2 and 3 calculated. whats this 7/1.0481 ?? indicate?The current market value of bond 2 must be equal to the interest in 1 years time discounted at the 1 year yield (which has been calculated already for bond 1) plus the interest and redemption in 2 years time discounted at the 2 year yield rate.
It is the same logic for bond 3.
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