Question

A bond is 1.5 years from maturity, has a 4% coupon rate, 5% yield, and pays...

A bond is 1.5 years from maturity, has a 4% coupon rate, 5% yield, and pays semiannually. If the yield decreases by 70 basis points, calculate the percentage change in the bond price using the bond formula. Hint: Your answer should expressed as a rate, remember not to use the percentage symbol in your answer.

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
A bond has 3 years to maturity, 8% coupon, 7% yield and pays annually. Suppose yield...
A bond has 3 years to maturity, 8% coupon, 7% yield and pays annually. Suppose yield decreases by 15 basis points, calculate the duration of your bond. 2.69 years 2.79 years 5.38 years 5.58 years None of the above
A 6.7% coupon bearing bond that pays interest semi-annually has a yield to maturity of 6.3%...
A 6.7% coupon bearing bond that pays interest semi-annually has a yield to maturity of 6.3% per year. If the bond has a duration of 13.2 years and the market yield decreases 32 basis points, calculate an estimate of the percent price change due to duration alone. (Answer to the nearest hundredth of a percent, i.e. 1.23 but do not use a % sign).
A two-year corporate bond has a coupon rate of 4 percent. The one-year spot rate is...
A two-year corporate bond has a coupon rate of 4 percent. The one-year spot rate is 3 percent and the forward rate is 5 percent. The bond’s credit spread is 1 percent for both the one-year and the two-year maturities a. What is the price of the bond expressed as a percentage of its face value? b. What is the bond’s yield to maturity? c. What is the bond price calculated with the bond’s yield to maturity? d. Calculate the...
A bond for the Chelle Corporation has the following characteristics: Maturity - 12 years Coupon -...
A bond for the Chelle Corporation has the following characteristics: Maturity - 12 years Coupon - 9% Yield to maturity - 7.50% Macaulay duration - 7.83 years Convexity - 76.81 Noncallable Assume bond pays interest semiannually. Use only the data provided in the table above (in the problem statement) for your calculations. When rates decline, the price of callable bond increases at a -Select-slowerhigherItem 5 rate than the price of noncallable bond. Calculate the approximate price change for this bond...
A bond has 2 year to maturity, 6% coupon, 8% yield and pays annually. The current...
A bond has 2 year to maturity, 6% coupon, 8% yield and pays annually. The current price of the bond is $964.3347. If yield increases by 25 basis points, calculate the new bond price using the time value of money formulas (i.e., bond formula). 972.12 970.53 963.99 959.95 None of the above
A bond with a $1,000 par, 5 years to maturity, a coupon rate of 5%, and...
A bond with a $1,000 par, 5 years to maturity, a coupon rate of 5%, and annual payments has a yield to maturity of 3.4%. What will be the actual percentage change in the bond price if the yield changes instantaneously to 5.6%? (If your answer is, e.g., 1.123%, enter it as 1.123.)
A bond with a $1,000 par, 6 years to maturity, a coupon rate of 4%, and...
A bond with a $1,000 par, 6 years to maturity, a coupon rate of 4%, and annual payments has a yield to maturity of 4.3%. What will be the actual percentage change in the bond price if the yield changes instantaneously to 5.5%? (If your answer is, e.g., 1.123%, enter it as 1.123.)
A bond with a $1,000 par, 7 years to maturity, a coupon rate of 4%, and...
A bond with a $1,000 par, 7 years to maturity, a coupon rate of 4%, and annual payments has a yield to maturity of 4%. What will be the actual percentage change in the bond price if the yield changes instantaneously to 5.5%? (If your answer is, e.g., 1.123%, enter it as 1.123.)
(Bonds) A bond with a $1,000 par, 5 years to maturity, a coupon rate of 5%,...
(Bonds) A bond with a $1,000 par, 5 years to maturity, a coupon rate of 5%, and annual payments has a yield to maturity of 3.4%. What will be the percentage change in the bond price if the yield changes instantaneously to 5.8%? (If your answer is, e.g., -1.123%, enter it as -1.123. If the sign of the price change is incorrect, no credit will be given.) Please and thanks
A $5,000 bond with a coupon rate of 6.8​% paid semiannually has nine years to maturity...
A $5,000 bond with a coupon rate of 6.8​% paid semiannually has nine years to maturity and a yield to maturity of 6.6​%. If interest rates fall and the yield to maturity decreases by​ 0.8%, what will happen to the price of the​ bond?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT