Question

An 8% 15 year bond has a YTM of 7%. If the YTM falls by 1%,...

An 8% 15 year bond has a YTM of 7%. If the YTM falls by 1%, what will the new price be? What will it be approximately? Is duration adequate to describe this bond? Why positive or negative?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An 8% 15 year bond has a yield to maturity of 7%. If the YTM falls...
An 8% 15 year bond has a yield to maturity of 7%. If the YTM falls by 1%, - what will the new price be? - What will it be approximately? - is duration adequate to describe this bond?
A coupon bond has 10-years to maturity and a YTM of 8%. If the YTM instantaneously...
A coupon bond has 10-years to maturity and a YTM of 8%. If the YTM instantaneously increases to 9%, what happens to the bond’s price and duration? The price decreases and the duration increases. The price increases and the duration decreases. The price decreases and the duration decreases. The price decreases and the duration stays the same 3- Which of the following would not be expected to cause yield spreads to widen? The firm is involved in an accounting scandal....
1.         Suppose you buy a 2 year 5% bond that has a yield to maturity (YTM)...
1.         Suppose you buy a 2 year 5% bond that has a yield to maturity (YTM) of 6%. What is the price of the bond? 2.         Suppose you buy a 3 year 6% bond that has a YTM of 5%. What is the price of the bond? 3.         Suppose you buy a 10 year 9% bond that has a YTM of 11%. What is the price of the bond? 4.         Suppose you buy a 30 year 7% bond that has...
Suppose you buy a 6 year 12% bond that has a YTM of 9%. What is...
Suppose you buy a 6 year 12% bond that has a YTM of 9%. What is the price of the bond? Suppose you buy a 30 year bond that pays a 6% coupon for the first 15 years and a 8% coupon for the last 15 years. The YTM of this bond is 7%. What is the price of the bond? 7.         What is the YTM of a 5 year 8% bond that is currently selling for $1050? 8.         What...
A 30-year maturity bond making annual coupon payments with a coupon rate of 7% has duration...
A 30-year maturity bond making annual coupon payments with a coupon rate of 7% has duration of 15.16 years and convexity of 315.56. The bond currently sells at a yield to maturity of 5%.     a. Find the price of the bond if its yield to maturity falls to 4% or rises to 6%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)       Yield to maturity of 4% $       Yield to maturity of 6%...
1. A 12-year semiannual bond with a coupon rate of 6% has a face value of...
1. A 12-year semiannual bond with a coupon rate of 6% has a face value of $1,000 and a YTM of 7%. The price of the bond is A. 912.85. B. 914.25. C. 916.36. D. 919.71 E. 920.57 2. A 4-year discount bond with a face value of $1,000 sells at $915. The YTM of the bond is A. 2.24%. B. 2.52% C. 2.83% D. 3.21% E. 3.48% 3. A 7-year semiannual bond with a face value of $1,000 and...
What is the price of a twenty-year bond if the YTM is 7%, has a coupon...
What is the price of a twenty-year bond if the YTM is 7%, has a coupon rate of 6.8%, and it has ten years left to maturity?
Calculate the new price of bond at the new YTM of 2%, 4%, 6%, 8%, and...
Calculate the new price of bond at the new YTM of 2%, 4%, 6%, 8%, and 10% for both 5-years bond and 30-years bond. Plot the graph of the relationship between the price and YTM for each bond on the same graph. What did you find regarding the relationship between price and YTM for shorter and longer maturity bond? Which bond has a higher sensitive to the change in the price when the yield change? Bond Rating Coupon Rate (%)...
Bond B has 7 years to maturity. It’s YTM right now is 5%. If the bond...
Bond B has 7 years to maturity. It’s YTM right now is 5%. If the bond has a Macaulay duration of 6.1 years and convexity of 25, what is the percentage change in the bond price if interest rates suddenly decrease by 1.1%? Assume annual compounding. Group of answer choices 6.60% -6.06% -6.24% 6.54%
a) An HSBC bond has a face value of 1000, a coupon rate of 8%, 3...
a) An HSBC bond has a face value of 1000, a coupon rate of 8%, 3 years until maturity and a yield to maturity of 7%. Calculate bond duration. D= ? *[cash flowt/(1+YTM)t]}/price of bond where t is time to maturity and YTM stands for yield to maturity. N.B: You need to show how you have calculated duration. A single value will not suffice. b) HSBC has issued a 9-year bond with YTM of 10% and duration of 7.194 years....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT