Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates.
Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000. Estimate the percentage change in price for a 200 basis-point increase in interest rates.
Chapter14: Investing In Stocks And Bonds
Section: Chapter Questions
Problem 7DTM
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The second question. Thank you.
![Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000.
Estimate the percentage change in price for a 200 basis-point increase in interest rates.
A. -5.4%
B. -6.4%
C.
QUESTION 14
-8.6%
OD. -4.8%
QUESTION 15
Using the information in Question 14 above, estimate the price of the bond for a 200 basis-point increase in interest rates.
O A. $936
B.
³. $1002
C. $964
O D. $1012](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7858d89c-2f53-4700-9307-dd97274d2ae7%2F5db15a82-586c-42bb-8b41-539ff07facda%2Frhpsirl_processed.png&w=3840&q=75)
Transcribed Image Text:Consider a bond with a modified duration (in years) of 3.2. Coupon rate and yield to maturity are the same. Par value is $1,000.
Estimate the percentage change in price for a 200 basis-point increase in interest rates.
A. -5.4%
B. -6.4%
C.
QUESTION 14
-8.6%
OD. -4.8%
QUESTION 15
Using the information in Question 14 above, estimate the price of the bond for a 200 basis-point increase in interest rates.
O A. $936
B.
³. $1002
C. $964
O D. $1012
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