Question

Consider a 2-year bond with 6% coupon rate and a yield to maturity of 7%. Calculate...

Consider a 2-year bond with 6% coupon rate and a yield to maturity of 7%. Calculate the duration of the bond.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Duration of bond = 1.9429 years

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
a) First, consider a 10 year bond with a coupon rate of 7% and annual coupon...
a) First, consider a 10 year bond with a coupon rate of 7% and annual coupon payments. Draw a graph showing the relationship between the price and the interest on this bond. The price should be on the y- axis and the interest rate on the x-axis. To compute the various prices, consider interest rates between 2% and 12% (use 0.5% increments). So your x-axis should go from 2%, then 2.5% ... until 11.5% and then 12%. Is the relationship...
Consider a 6-year, $1,000 par bond that pays semi-annual coupon. Its yield to maturity is 7%...
Consider a 6-year, $1,000 par bond that pays semi-annual coupon. Its yield to maturity is 7% and is selling for $1,095.452? Find the coupon rate of this bond.
1. The price of a 20-year coupon bond, coupon rate 7% p.a., yield to maturity 6%...
1. The price of a 20-year coupon bond, coupon rate 7% p.a., yield to maturity 6% p.a., face value of $100 is closest to (assuming semi-annual compounding) Questions 2, 3, 4, 5 and 6 refer to the following information. A one- year bond with a 5% annual coupon rate has a current market price of $101. A two year bond with 7% annual coupons has a market price of $98. A three-year bond with 9% annual coupons has a market...
A 30-year maturity bond making annual coupon payments with a coupon rate of 7% has duration...
A 30-year maturity bond making annual coupon payments with a coupon rate of 7% has duration of 15.16 years and convexity of 315.56. The bond currently sells at a yield to maturity of 5%.     a. Find the price of the bond if its yield to maturity falls to 4% or rises to 6%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)       Yield to maturity of 4% $       Yield to maturity of 6%...
(8 marks) Consider a 6-year, $1,000 par bond that pays semi-annual coupon. Its yield to maturity...
Consider a 6-year, $1,000 par bond that pays semi-annual coupon. Its yield to maturity is 7% and is selling for $1,095.452? Find the coupon rate of this bond.
Consider a bond that has a coupon rate of 5%, five years to maturity, and is...
Consider a bond that has a coupon rate of 5%, five years to maturity, and is currently priced to yeild 6%.Calculate the following: a)Macaulay duration b) Modified duration c)Effective duration d)Percentage change in price for a 1% increase in the yield to maturity
A bond with a yield to maturity of 3% and a coupon rate of 3% has...
A bond with a yield to maturity of 3% and a coupon rate of 3% has 3 years remaining until maturity. Calculate the duration and the modified duration for this bond assuming annual interest payments and a par value of $1,000. Why is the duration of this bond higher than the 3-year 10% coupon bond yielding 10% we looked at in the notes that had a duration of 2.7 years? If the required market yield on this bond increases to...
A bond with a 3-year maturity has a coupon rate of 6% and a face value...
A bond with a 3-year maturity has a coupon rate of 6% and a face value of $1,000. The coupons are paid annually and the next coupon is due in one year. The bond’s yield to maturity is 9%. What is its Macaulay Duration?
Consider a four year annual bond paying a 8.5% coupon, with a yield to maturity of...
Consider a four year annual bond paying a 8.5% coupon, with a yield to maturity of 9.3%. What is the duration of the bond? A. 3.831 B. 3.785 C. 3.614 D. 3.548
A 2-year zero-coupon bond is selling for $890.00. What is the yield to maturity of this...
A 2-year zero-coupon bond is selling for $890.00. What is the yield to maturity of this bond? The price of a 1-year zero coupon bond is $931.97. What is the yield to maturity of this bond? Calculate the forward rate for the second year.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT