i, would you help me to solve question 2 below? I know it is a semi-annual bond but I'm not sure about how to caluculate the PV of the coupon payments and its face value. Thank you very much! You have a semi-annual bond with 25 years to maturity with a 10% coupon rate and par value of £1000. The current YTM of the bond is 10%, the modified duration is 9.12 and the convexity is 141.03. What is the percentage price change if interest rate were to fall 125 basis points considering both duration and convexity? What is the estimated price with 125 basis points decrease in Yield?
i, would you help me to solve question 2 below? I know it is a semi-annual bond but I'm not sure about how to caluculate the PV of the coupon payments and its face value. Thank you very much! You have a semi-annual bond with 25 years to maturity with a 10% coupon rate and par value of £1000. The current YTM of the bond is 10%, the modified duration is 9.12 and the convexity is 141.03. What is the percentage price change if interest rate were to fall 125 basis points considering both duration and convexity? What is the estimated price with 125 basis points decrease in Yield?
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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Hi, would you help me to solve question 2 below? I know it is a semi-annual bond but I'm not sure about how to caluculate the PV of the coupon payments and its face value. Thank you very much!
You have a semi-annual bond with 25 years to maturity with a 10% coupon rate and par value of £1000. The current YTM of the bond is 10%, the modified duration is 9.12 and the convexity is 141.03.
- What is the percentage price change if interest rate were to fall 125 basis points considering both duration and convexity?
- What is the estimated price with 125 basis points decrease in Yield?
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