Plz 1) Find the duration of a 6% coupon bondmaking annual coupon payments if it hasthree years until maturity, $1,000 parvalue, and a yield to maturity of 10%.Round your answer to three decimalplaces.2) A 30-year maturity, 8% coupon bondpaying coupons semiannually is callablein five years at a call price of $1,100. Thebond currently sells at a yield to maturityof 7% and has a par value of $1,000.What is its yield to call? Enter youranswer as a decimal, rounded to fourdecimal places.(Hint: First compute the current price ofthe bond based on YTM)

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1) Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity, $1,000 par value, and a yield to maturity of 10%. Round your answer to three decimal places.

1) Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity, $1,000 par value, and a yield to maturity of 10%. Round your answer to three decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 4P

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

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Plz

1) Find the duration of a 6% coupon bond
making annual coupon payments if it has
three years until maturity, $1,000 par
value, and a yield to maturity of 10%.
Round your answer to three decimal
places.
2) A 30-year maturity, 8% coupon bond
paying coupons semiannually is callable
in five years at a call price of $1,100. The
bond currently sells at a yield to maturity
of 7% and has a par value of $1,000.
What is its yield to call? Enter your
answer as a decimal, rounded to four
decimal places.
(Hint: First compute the current price of
the bond based on YTM)

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