A bond that pays interest annually has a 6 percent promised yield and a price of $1,025. Annual interest rates are now projected to fall 50 basis points. The bond's duration is six years. What is the predicted new bond price after the interest rate change? (Watch your rounding.) 17 Multiple Choice O $1,042.33 $995.99 $1,054.01 $987.44 None of these choices are correct. Mc
A bond that pays interest annually has a 6 percent promised yield and a price of $1,025. Annual interest rates are now projected to fall 50 basis points. The bond's duration is six years. What is the predicted new bond price after the interest rate change? (Watch your rounding.) 17 Multiple Choice O $1,042.33 $995.99 $1,054.01 $987.44 None of these choices are correct. Mc
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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Question
![A bond that pays interest annually has a 6 percent promised yield and a price of $1,025. Annual interest
rates are now projected to fall 50 basis points. The bond's duration is six years. What is the predicted new
bond price after the interest rate change? (Watch your rounding.)
17
Multiple Choice
O $1,042.33
$995.99
$1,054.01
$987.44
None of these choices are correct.
Mc](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50ecada7-73ae-429a-bfd7-3c03fe93abe4%2Fc3fff847-f09d-472e-ab27-567ec542bfd9%2Facq751.jpeg&w=3840&q=75)
Transcribed Image Text:A bond that pays interest annually has a 6 percent promised yield and a price of $1,025. Annual interest
rates are now projected to fall 50 basis points. The bond's duration is six years. What is the predicted new
bond price after the interest rate change? (Watch your rounding.)
17
Multiple Choice
O $1,042.33
$995.99
$1,054.01
$987.44
None of these choices are correct.
Mc
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