A ten-year 6% $1,000 bond having annual coupons and a redemption of $1,200 if the yield to maturity is 8% Calculate: 1. the Macaulay • duration, and 2. the Macaulay convexity.
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- Prepare a duration table for a coupon bond using the following assumptions: a. $100,000 par value b. 7% coupon rate c. 10-year maturity d. Annual interest payments e. Discount rate of 12%4) A 10 year bond with $50, 000 face value has semiannual coupon rate 4% and semiannual yield rate 2%. Fill out the following amortization table. Principle Outstanding t Payment Interest герaid Balance 1 2 3 12M4
- A 7,000, 5% bond with annual coupons, redeemable at 108 at the end of 5 years is priced to yield 4%, m=1. Construct a table showing the amortization of premium. (Amortization of Premium)Give typing answer with explanation and conclusionCompute the Macaulay duration under the following conditions: a. A bond with a four-year term to maturity, a 10% coupon (annual payments), and a market yield of 8%. Do not round intermediate calculations. Round your answer to two decimal places. Assume $1,000 par value. _________ years b. A bond with a four-year term to maturity, a 10% coupon (annual payments), and a market yield of 12%. Do not round intermediate calculations. Round your answer to two decimal places. Assume $1,000 par value. _________ years c. Compare your answers to Parts a and b, and discuss the implications of this for classical immunization. As a market yield increases, the Macaulay duration -(Select:declines/increases) . If the duration of the portfolio from Part a is equal to the desired investment horizon the portfolio from Part b is -(Select: no longer/still) perfectly immunized. Only typed answer
- Required to show your work:Bond ABC：Coupon rate(%): 4.5% (annual payment)Current market:??Tenior:15 YearsSuppose the yield to maturity of bond E is 3.7% and face value equals to $1,000,calculate the current market price of bond ABC.. A 7,000, 5% bond with annual coupons, redeemable at 108 at the end of 5 years is pricedto yield 4%, m=1. Construct a table showing the amortization of premium. (Amortization ofPremium)A. Compute the current price of each of the following bonds (assume $1,000 par value): a. 6 year, 6% quarterly bond; 12% market yield b. 20 year zero coupon bond; 6% market yield c. 10 year, 10% semiannual bond; 8% market yield
- You purchase a zero coupon bond with 12 years to maturity and a yield to maturity of 4.93 percent. The bond has a par value of $1,000. What is the implicit interest for the first year? Assume semiannual compounding. a.$27.12 b.$26.89 c.$27.82 d.$24.34 e.$26.71Assume a bond that promises eight annual coupon payments of $70 and will repay its face value of $1000 at the end of the eight years. Assuming that you are offered the bond for a price of $1035.94, use detailed workings to compute the implied YTMWhat is the Macaulay duration of a semiannual-pay 7.39 percent coupon bond with 12 years to maturity and a yield to maturity of 6.35 percent? Answer to two decimals, carry intermediate calcs. to four decimals.Assume 1,000 par value and semi annual compounding