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book value formula bond. Price of bond is calculated using the formula given below. The carrying value of a bond refers to the net amount between the bonds face value plus any un-amortized premiums or minus any amortized discounts.
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The investor should not be willing to pay more than Rs. 1000 bond is worth Rs. C 7 100000 7000.
That factor is 822.
Portfolio Duration w 1 D 1 w 2 D 2 w K D K w i market value of bond i market value of portfolio D i duration of bond i. Below is the Book Value Formula. The maturity of a bond is 5 years. Since the coupon rate is lower than the YTM the bond price is less than the face value and as such the bond is said to be traded at a discount.
