Question

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. |

b. |
What is the expected change in the price of the bond if interest
rates are expected to decline by 0.7 percent? |

Answer #1

Solution :-

A )

Face Value= $1000

Coupon Rate =10%

Yield Rate= 14%

Maturity= 2 years

Duration of Bond = 1.906 Years

New interest Rate = 14% - 0.7% = 13.3%

Price = $945.17

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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....

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...

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...

What is the duration of a two-year bond that pays an annual
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(e.g., 32.1616))
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places. (e.g., 32.1616))
b. What is the duration of a two-year zero-coupon
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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
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)

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32.1616)) b. What is the duration of a two-year zero-coupon bond
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*please show using financial calculator if possible*

Problem 3-29 (LG 3-6)
a. What is the duration of a two-year bond that
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a.
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b.
If...

Bond P is a premium bond with a coupon rate of 10 percent. Bond
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What is the current yield for bond P and bond D? (Do not
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