A bond has a price of $98 (per $100 of face value), and yield to maturity of 7% and a duration of 18 years. The yield on the bond changes to 7.8%. What is the new price? (Answer in two decimals)
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- Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has a face value of $1,000 and a yield to maturity of 10.5883%. The bond pays coupons semiannually. What is the bond’s current yield?Assume a bond with a 10% annual rate has 8 years left to maturity when market rates are at 12%. Assume semi-annual payments. What is the price of the bond at 3 different points in time - today, in 1 year, and in 2 years. Is this a discount or premium bond, and what do you notice about the relationship between the price and maturity value (FV) over time?A bond currently sells for $1,080, which gives it a yield to maturity of 7%. Suppose that if the yield increases by 50 basis points, the price of the bond falls to $1,050. What is the duration of this bond? (Do not round intermediate calculations. Round your answer to decimal places.) Duration years
- You have a bond with a modified duration of 14 years currently. The convexity of the bond is 169. In the event that the bond's yield changes from 8.6% to 10%, what will be the approximate percentage change in the bond's price? Enter your answer as a decimal number or with the percentage sign.What is the Macaulay duration of a semi-annual bond with a coupon rate of 7 percent, five years to maturity, and a current price of $959? What is the modified duration? Duration is __. years. Modified duration is __ years.A nine-year bond has a yield of 10% and a duration of 7.194 years. If the bond's yield to maturity changes by 50 basis points, what is the approximate percentage change in the bond's price?
- Bonds have a maturity risk premium that can be modeled as the following:MRP = (t-1) 0.3%were t represents the years to maturity. What is the Maturity risk premium of a bond that matures in 8 years? answer in % without the symbolA ten-year bond has a yield of 11% and a duration of 7.205 years. If the bond's yield increases by 75 basis points, what is the percentage change in the bond's price as predicted by the duration formula? (Input the value as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.)The bond's price decreased by _____.A one-year bond currently pays 3.6% interest. It's expected that it will pay 3.1% next year and 2.0% the following year. The two-year term premium is 0.1% while the three-year term premium is 0.15%. What is the interest rate on a three-year bond according to the liquidity premium theory? O 3.00% O 1.15% O 3.05% O 2.9%
- You find a zero bond with a par value of $10,000 and 23 years to maturity. The yield to maturity on this bond is 4.5 percent. Assume semiannual compounding periods. What is the price of the bond?A bond currently sells for 1,200, which gives it a yield to maturity of 8%. Suppose that if the yield increases by 25 basis points, the price of the bond declines to 1,155. Based on this price change, what is the duration of the bond? How do i calculate this?Suppose you can observe that 1-year bond interest rate is 4%, 2-year bond interest rate is 8%, and 3-year bond interest rate is 10% at time t. It is also known that the term premium on a 2-year bond is 1% and the term premium on a 3-year bond is 1.5%. a) What are the market's expected 1-year bond interest rates for the next two years from time t? b) How to interpret those expected short-term interest rates? (what would be the "possible" economic meanings in the expected short- term interest rates?) Discuss as least two "candidates" to explain them.