Calculate the Macaulay duration of a 9%, $1,000 par bond that matures in three years of the bond's YTM is 10% and interest is paid semiannually. a. Calculate this bond's modified duration. Do not round intermediate calculations. Round your answer to two decimal places. years b. Assuming the bond's YTM goes from 10% to 9.5%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal places. Use a minus sign to enter negative value, if any.

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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Problem 13-01
Calculate the Macaulay duration of a 9%, $1,000 par bond that matures in three years if the band's YTM is 10% and interest is paid semiannually.
a. Calculate this band's modified duration. Do not round intermediate calculations. Round your answer to two decimal places.
years
b. Assuming the bond's YTM goes from 10% to 9.5%, calculate an estimate of the price change. Do not round intermediate calculations, Round your answer to three decimal
places. Use a minus sign to enter negative value, if any.
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Transcribed Image Text:Problem 13-01 Calculate the Macaulay duration of a 9%, $1,000 par bond that matures in three years if the band's YTM is 10% and interest is paid semiannually. a. Calculate this band's modified duration. Do not round intermediate calculations. Round your answer to two decimal places. years b. Assuming the bond's YTM goes from 10% to 9.5%, calculate an estimate of the price change. Do not round intermediate calculations, Round your answer to three decimal places. Use a minus sign to enter negative value, if any. Grade it Now Save & Continue
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