18 Jul WHAT IS THE DURATION OF THIS BOND? September 19, 2018Posted by: kajo No
WHAT IS THE DURATION OF THIS BOND?
September 19, 2018Posted by: kajo No Comments
A bond with 3 years remaining to maturity has an annual coupon rate of 8.5% and a face value of $1 Show more A bond with 3 years remaining to maturity has an annual coupon rate of 8.5% and a face value of $1000. Assume the yield to maturity is 7.00% and answer the questions below. (You may use a financial calculator to get the PV of the bond in this problem but show your calculator entries i.e. 1000 FV etc). a) What is the duration of this bond? b) If interest rates fall 0.15% from the given YTM by what percent will the bond change in value? Show this 2 ways (using modified duration and the capital gains formula method). Show less
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