MACAULAY DURATION AND MODIFIED MACAULAY MODELS IN PRICING, VALUATION AND RISK MANAGEMENT OF BONDS FOR TRANSPORT INFRASTRUCTURE FINANCE
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Date
2023
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Redeemer’s University Journal of Management and Social Sciences
Abstract
The role of bonds deployment in funding transport infrastructure projects cannot be
overemphasised. In this paper, an investigation into Nigerian bonds used for the finance of
transport infrastructure was carried out. The aim is to enhance better decisions that will improve
participation and increase investors' confidence through assurance return on investment on the
pricing, risks, valuation and the management of the bonds. The study reveals MD and MM offer
reliable tool to enhance knowledge of the various types of bonds with their associated risks
attached to specific Nigeria's bond. Macaulay duration and modified Macaulay duration models
were employed to overcome risk management and for the Investor to have a clear expectant yield
at the end of maturity date. The result offers a reliable feat in making better decisions relating to
pricing, valuation and the management of any Nigerian bond both by individual investors and
corporate organisations