A 9-year annual coupon bond is currently selling for its par value of $10,000 with an annual yield of 7%. If the bond is callable at par, what is the effective duration of the bond, assuming rates change by 1.1%? A 13-year zero coupon bond with a face value of $1,000 is currently selling for $43.4. Using the bond's modified duration, what is the approximate %age change in the price of the bond if interest rates rise by 77 basis points? A bond has a Macaulay's duration of 13.6 years. If rates changes from 3.8% to 4.7%, what will be the %age change bonds price? Please write the answer in TWO decimal places and NOT PERCENTAGE.
A 9-year annual coupon bond is currently selling for its par value of $10,000 with an annual yield of 7%. If the bond is callable at par, what is the effective duration of the bond, assuming rates change by 1.1%? A 13-year zero coupon bond with a face value of $1,000 is currently selling for $43.4. Using the bond's modified duration, what is the approximate %age change in the price of the bond if interest rates rise by 77 basis points? A bond has a Macaulay's duration of 13.6 years. If rates changes from 3.8% to 4.7%, what will be the %age change bonds price? Please write the answer in TWO decimal places and NOT PERCENTAGE.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A 9-year annual coupon bond is currently selling for its par value of $10,000 with an annual yield of 7%. If the bond is callable at par, what is the effective duration of the bond, assuming rates change by 1.1%? A 13-year zero coupon bond with a face value of $1,000 is currently selling for $43.4. Using the bond's modified duration, what is the approximate %age change in the price of the bond if interest rates rise by 77 basis points? A bond has a Macaulay's duration of 13.6 years. If rates changes from 3.8% to 4.7%, what will be the %age change
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