Question

. Suppose we have a bond with current price of $102, 2.35% YTM, and Modified Duration...

. Suppose we have a bond with current price of $102, 2.35% YTM, and Modified Duration of 7.8; if the YTM decreases to 2.45%, use its Modified Duration to find the new price.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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 $1000 par semiannual-pay bond has a current price of $931 has a modified duration of...
A $1000 par semiannual-pay bond has a current price of $931 has a modified duration of 4.71. Suppose the yield on the bond suddenly increases by 0.67 percent. Use duration to estimate the new price of the bond.
The current YTM of a semi annual bond with a 6.2 year duration is 9.2%. Calculate...
The current YTM of a semi annual bond with a 6.2 year duration is 9.2%. Calculate the percentage rate of change in the price of the bond if the YTM increases by 80 basis points.
1)Consider a bond selling at par with modified duration of 22-years and convexity of 415. If...
1)Consider a bond selling at par with modified duration of 22-years and convexity of 415. If the yield decreases by 2%, what would be the percentage price change according to the duration-with-convexity rule? 44% 52.3% 60.6% 80% 2)Bond A has an 8-year duration and is priced at $1,070. Its yield to maturity is 9%. If the yield to maturity falls to 8.42%, you would predict that the new value of the bond will be approximately ________. $1,024.5 $1,070.0 $1,115.5 $1,160.1
A bond has a modified duration of 9.45 and yield to maturity of 7.8 percent. If...
A bond has a modified duration of 9.45 and yield to maturity of 7.8 percent. If interest rates increase by 60 basis points, the bond's price will decrease by _______ percent. A) 3.89 B) 4.38 C) 5.67 D) 6.33
Suppose we have a portfolio of two bonds with the weights being 50% and 50% and...
Suppose we have a portfolio of two bonds with the weights being 50% and 50% and the current YTM is 10%. We also know that, for a 50 basis point increase in interest rate, the first bond price decreases by about 6% and the second bond price decrease by about 4%. What is the duration of the portfolio? A. 10 B. 11 C. 12 D. 13
What is the Macaulay duration of a bond with a coupon of 7.8 percent, eight years...
What is the Macaulay duration of a bond with a coupon of 7.8 percent, eight years to maturity, and a current price of $1,034.50? What is the modified duration? (Round to 3 decimal places).
find with formulas Modified Duration:          For this bond:    coupon interest rate: 5%. yield: 4%; semiannual...
find with formulas Modified Duration:          For this bond:    coupon interest rate: 5%. yield: 4%; semiannual pay; 2 years.          a.      find the bond price in decimal format (as though principal is 1.0) and in percentage-of- par format.          b.      using that price find the Macauley Duration.          c.      using Macauley Duration find Modified Duration
Suppose you have a 3.25% coupon bond with a ytm of 1.50 percent and a term-to-maturity...
Suppose you have a 3.25% coupon bond with a ytm of 1.50 percent and a term-to-maturity of 3 years. The bond pays its coupon ANNUALLY(once per year) and has a face value of $1,000. What is this bond’s price? What is its duration?  
A callable bond has a first call price of 102 and an MD of 7.38. It...
A callable bond has a first call price of 102 and an MD of 7.38. It trades at 101.37 to yield 7.8%. Using MD to estimate the price changes, what is the bond's effective duration?
A 25-year semiannual bond has 10% coupon rate and par value $1,000. The current YTM of...
A 25-year semiannual bond has 10% coupon rate and par value $1,000. The current YTM of the bond is 10%. Its Macaulay duration is 9.58 years and convexity is 141.03. (1) What is the bond’s modified duration? (2 points) (2) What is the percentage price change if interest rate were to fall 125 basis points considering both duration and convexity? (4 points) (3) What is the estimated price with 125 basis points decrease in yield? (4 points)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT