homework

Assignment -2

Academic Year: 1442/1443 H

For Instructor’s Use only

Instructions – PLEASE READ THEM CAREFULLY

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks.

· All answered must be typed using Times New Roman (size 12, double-spaced) font.

· Submissions without cover page will NOT be accepted.

Assignment 2

Submission Date by students: 24/11/2021

Place of Submission: Students Grade Centre via blackboard.

Weight: 05 Marks

Assignment Purposes/Learning Outcomes:

CLO-3. Demonstrate investment arrangements as part of the process for implementing an investment strategy. ( PLO-2.2)

CLO-4. Demonstrate the valuation methods used for valuation of the common forms of debt, equity, property and derivative securities.( PLO-2.3).

Assignment Question(s): (Marks 5)

Q.1. Explain the differences among various concepts of yield such as yield to maturity, yield to call, and anticipated realized yield. ( 2 Marks)

Q.2. Explain the effect that duration has on bond price sensitivity to interest rate changes and relate zero-coupon bonds to the concept of duration.

( 2 Marks )

Q.3. Discuss the basic concept of an option and define strike price, intrinsic value, and speculative premium. ( 1 Mark)

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