Calculate the modified duration for a 8 year, 7.86% coupon bond with a yield to maturity of 7.49%. Assume the bond pays interest semi- annually and has a par value of $100. Use a 20 basis point change as the annual change in rate for the duration calculation, and round all intermediate calculations to four digits. The modified duration is
Calculate the modified duration for a 8 year, 7.86% coupon bond with a yield to maturity of 7.49%. Assume the bond pays interest semi- annually and has a par value of $100. Use a 20 basis point change as the annual change in rate for the duration calculation, and round all intermediate calculations to four digits. The modified duration is
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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![Calculate the modified duration for a 8 year,
7.86% coupon bond with a yield to maturity
of 7.49%.
Assume the bond pays interest semi-
annually and has a par value of $100. Use a
20 basis point change as the annual
change in rate for the duration calculation,
and round all intermediate calculations to
four digits.
The modified duration is](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F913a663f-0e96-46f8-98f3-deeb8e5dc0b0%2Fcc47bcb4-0ae6-4625-b2c5-63c9093c4e91%2Fwh89pz_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Calculate the modified duration for a 8 year,
7.86% coupon bond with a yield to maturity
of 7.49%.
Assume the bond pays interest semi-
annually and has a par value of $100. Use a
20 basis point change as the annual
change in rate for the duration calculation,
and round all intermediate calculations to
four digits.
The modified duration is
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