BBK 1000,7% 2 years were corporate bonds floated by Barclays bank of Kenya. The bonds were sold at a discount of Ksh 950. Assume that the prevailing rates of interest were 9%. Required: (a) Compute...

BBK 1000,7% 2 years were corporate bonds floated by Barclays bank of Kenya. The bonds were sold at a discount of Ksh 950. Assume that the prevailing rates of interest were 9%.

Required:

(a) Compute the yield to maturity

(b) Determine the value of the bond at the point of purchase

(c) Explain the concept of bond stripping.