For the following four (4) questions, consider a 4-year, $1,000 par value, 7 percent annual coupon bond that is trading to yield 7 percent. 9b-19 What is the duration of this bond? a. 4.000 years. b. 3.557 years. C. 2.000 years. d. 3.624 years. e. Answer: 3.847 years. Ꭰ 9b-20 If interest rates increase to 8 percent, what is the amount of error (Pduration - Pmarket) in the price estimate using the duration relationship versus the true bond price determined in the market? a. +$0.12. b. -$0.75. C. -$4.26. d. +$0.75. e. -$0.12. B Answer:
For the following four (4) questions, consider a 4-year, $1,000 par value, 7 percent annual coupon bond that is trading to yield 7 percent. 9b-19 What is the duration of this bond? a. 4.000 years. b. 3.557 years. C. 2.000 years. d. 3.624 years. e. Answer: 3.847 years. Ꭰ 9b-20 If interest rates increase to 8 percent, what is the amount of error (Pduration - Pmarket) in the price estimate using the duration relationship versus the true bond price determined in the market? a. +$0.12. b. -$0.75. C. -$4.26. d. +$0.75. e. -$0.12. B Answer:
Chemistry for Engineering Students
3rd Edition
ISBN:9781285199023
Author:Lawrence S. Brown, Tom Holme
Publisher:Lawrence S. Brown, Tom Holme
Chapter1: Introduction To Chemistry
Section: Chapter Questions
Problem 1.6PAE: Use the web to determine the differences in the amounts of aluminum recycled in states where there...
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Show steps how to get the amount of error (Pduration - Pmarket) for second question in the picture, the answer is -0.75
Please Write Step by Step Solution Otherwise I give DISLIKE !!

Transcribed Image Text:For the following four (4) questions, consider a 4-year, $1,000 par value, 7 percent
annual coupon bond that is trading to yield 7 percent.
9b-19 What is the duration of this bond?
a.
4.000 years.
b.
3.557 years.
C.
2.000 years.
d.
3.624 years.
e.
Answer:
3.847 years.
Ꭰ
9b-20 If interest rates increase to 8 percent, what is the amount of error (Pduration - Pmarket)
in the price estimate using the duration relationship versus the true bond price determined
in the market?
a.
+$0.12.
b.
-$0.75.
C.
-$4.26.
d.
+$0.75.
e.
-$0.12.
B
Answer:
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