Question

Consider the following. a. What is the duration of a two-year bond that pays an annual coupon of 12 percent and whose current yield to maturity is 14 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Duration of a bond ?

b. What is the expected change in the price of the bond if interest rates are expected to decline by 0.4 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Expected change in the price?

Answer #1

a) Statement showing duration of bond

Year | Interest | Repayment of principal | Total | PVIF @ 14% | Present value | Weight | Duration of bond = Weight * year |

1 | 120 | 120 | 0.8772 | 105.263 | 0.109 | 0.109 | |

2 | 120 | 1000 | 1120 | 0.7695 | 861.804 | 0.891 | 1.782 |

967.067 | 1.891 |

Thus duration of bond = 1.891 years

b) If Expected rate is 13.6% then value of bond is as follows

Year | Interest | Repayment of principal | Total | PVIF @ 13.6% | Present value |

1 | 120 | 120 | 0.8803 | 105.634 | |

2 | 120 | 1000 | 1120 | 0.7749 | 867.883 |

Value of bond | 973.517 |

Thus expected change in price = 973.517-967.067 = 6.450

expected change in %= 973.517-967.067/967.067

=6.67%

Consider the following.
a.
What is the duration of a two-year bond that pays an annual
coupon of 10 percent and whose current yield to maturity is 14
percent? Use $1,000 as the face value. (Do not round
intermediate calculations. Round your answer to 3 decimal places.
(e.g., 32.161))
b.
What is the expected change in the price of the bond if interest
rates are expected to decline by 0.7 percent? (Negative
amount should be indicated by a minus sign....

What is the duration of a two-year bond that pays an annual
coupon of 10 percent and whose current yield to maturity is 14
percent? Use $1,000 as the face value. (Do not round
intermediate calculations. Round your answer to 3 decimal places.
(e.g., 32.161)) (ANSWER TO THIS IS 1.9000 AND THAT IS CONFIRMED, I
NEED HELP WITH PART B)
b.
What is the expected change in the price of the bond if interest
rates are expected to decline by...

a. What is the duration of a two-year bond that pays an annual
coupon of 12 percent and whose current yield to maturity is 13
percent? Use $1,000 as the face value. (Do not round intermediate
calculations. Round your answer to 3 decimal places. (e.g.,
32.161))
b. What is the expected change in the price of the bond if
interest rates are expected to increase by 0.6 percent? (Negative
amount should be indicated by a minus sign. Do not round...

a. What is the duration of a two-year bond that
pays an annual coupon of 10.3 percent and has a current yield to
maturity of 12.3 percent? Use $1,000 as the face value. (Do
not round intermediate calculations. Round your answer to 4 decimal
places. (e.g., 32.1616))
b. What is the duration of a two-year zero-coupon
bond that is yielding 11.5 percent? Use $1,000 as the face
value.
a.
Duration
years
b.
Duration
years

a. What is the duration of a two-year bond that pays an annual
coupon of 11 percent and has a current yield to maturity of 13.7
percent? Use $1,000 as the face value. (Do not round intermediate
calculations. Round your answer to 4 decimal places. (e.g.,
32.1616)) (in years)
b. What is the duration of a two-year zero-coupon bond that is
yielding 11.5 percent? Use $1,000 as the face value. (in years
)

What is the duration of a two-year bond that pays an annual
coupon of 11 percent and has a current yield to maturity of 13.7
percent? Use $1,000 as the face value. (Do not round
intermediate calculations. Round your answer to 4 decimal places.
(e.g., 32.1616))
Duration=? years

a. What is the duration of a two-year bond that pays an annual
coupon of 11.2 percent and has a current yield to maturity of 13.2
percent? Use $1,000 as the face value. (Do not round intermediate
calculations. Round your answer to 4 decimal places. (e.g.,
32.1616)) b. What is the duration of a two-year zero-coupon bond
that is yielding 11.5 percent? Use $1,000 as the face value.
*please show using financial calculator if possible*

Problem 3-29 (LG 3-6)
a. What is the duration of a two-year bond that
pays an annual coupon of 10.9 percent and has a current yield to
maturity of 13.5 percent? Use $1,000 as the face value. (Do
not round intermediate calculations. Round your answer to 4 decimal
places. (e.g., 32.1616))
b. What is the duration of a two-year zero-coupon
bond that is yielding 11.5 percent? Use $1,000 as the face
value.

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a. What is the duration of a four-year Treasury bond with a 8
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b. What is the duration of a three-year Treasury bond with a 8
percent semiannual coupon selling at par?
c. What is the duration of a two-year Treasury bond with a 8
percent semiannual coupon selling at par? (For all requirements, do
not round intermediate calculations. Round your answers to 2
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a
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Consider a(n) Eight-year, 15.5 percent annual coupon bond with a
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