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Hello sir, firstly cant thank u enough for your help through this course and previously f5 and f9, i was doing Coedon co. q1 From dec 2012, i have 2 questions from that
1. they bonds are to be redeemed at par which should be 100, but the examiner redeemed at 105.92
2.the bonds are for 3 years and hence the calculation should be yr1-3 5.92 * annuity factor and in yr 3 redemption value, however the examiner has only taken years yr1-2 and redemption at yr 3,
thanks alot
1. The bonds are redeemed at par. The extra 5.2 is the interest in the final year.
2. By all means do what you have written, and the answer will be exactly the same 🙂
(If there is a small difference it is purely due to the rounding in the tables, which is irrelevant in the exam)
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