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when calculating the GRY for the bond, I tried discount factors of 5% and 3% . I got a GRY of 3.62%. (Examiner used 5% and 4% to get a GRY of 4.2%).
When I calculated the PV using the 3.62% discount factor I got the total PV of the bond as $1107.08.
The bond market price was $1079.68.
Is this still ok? because the examiner’s answer had just 0.02 difference due to rounding while I get a difference of $27.No problem – don’t worry.
The marks are for the workings, not for the final answer, and with different ‘guesses’ you will get a different answer, but will still get full marks (provided, obviously, that the marker can follow your workings and your arithmetic is correct 🙂 )
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