Question

A bond with a 3-year maturity has a coupon rate of 6% and a face value of $1,000. The coupons are paid annually and the next coupon is due in one year. The bond’s yield to maturity is 9%. What is its Macaulay Duration?

Answer #1

Macaulay Duration of the given
bond= **2.82621 years**

Details of calculation below:

A bond with a 2-year maturity has a coupon rate of 13% and a
face value of $1,000. The coupons are paid annually and the next
coupon is due in one year. The bond’s yield to maturity is 13%.
What is this bond’s Modified Duration?

bond has $1,000 face value, 25 years to maturity, 3.6% annual
coupon rate. The bond’s current price is $948.92. Assuming the bond
pays coupons semiannually, what is the bond’s yield to maturity
(YTM)?

A 20-year bond has 10% coupon rate (paid semi-annually; next
coupon due 6 months from today) and $1,000 face value. Its yield to
maturity (nominal, compounded semi-annually) is 8%.
How much is a rational investor willing to pay for the
bond?
If the yield to maturity decreases from 8% to 6%, what will
happen to the bond price?

A bond has $1,000 face value, coupon rate of 3.5%, and yield to
maturity (YTM) of 3.7%. It will mature in 16 years and the interest
rate will compound annually. What is this bond’s current yield?

A 25-year maturity bond with face value of $1,000 makes annual
coupon payments and has a coupon rate of 8.1%. (Do not
round intermediate calculations. Enter your answers as a percent
rounded to 3 decimal places.)
a. What is the bond’s yield to maturity if the
bond is selling for $910?
b. What is the bond’s yield to maturity if the
bond is selling for $1,000?
c. What is the bond’s yield to maturity if the
bond is selling for...

A 20-year maturity bond with face value of $1,000 makes annual
coupon payments and has a coupon rate of 8.8%. (Do not round
intermediate calculations. Enter your answers as a percent rounded
to 3 decimal places.)
a. What is the bond’s yield to maturity if the bond is selling
for $980?
b. What is the bond’s yield to maturity if the bond is selling
for $1,000?
c. What is the bond’s yield to maturity if the bond is selling
for...

2. Today, a bond has a coupon rate of 8.4 percent, par value of
1,000 dollars, YTM of 4.82 percent, and semi-annual coupons with
the next coupon due in 6 months. One year ago, the bond’s price was
1,041.94 dollars and the bond had 17 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.
3....

A 10-year bond has a face value of $1,000 with a 5% per annum
coupon rate. The bond pays coupons semi-annually. The current yield
to maturity of the bond is 4% per annum. After 5 years, the yield
to maturity of the bond is predicted to increase to 6% per annum,
what would be the value of the bond in Year 5?

1. Today, a bond has a coupon rate of 8.18 percent, par value of
1,000 dollars, YTM of 6 percent, and semi-annual coupons with the
next coupon due in 6 months. One year ago, the bond’s price was
1,022.04 dollars and the bond had 19 years until maturity. What is
the current yield of the bond today? Answer as a rate in decimal
format so that 12.34% would be entered as .1234 and 0.98% would be
entered as .0098.
2....

A U.S. Government T-Note with a 3-year maturity has a coupon
rate of 5% and a face value of $1,000. The coupons are
paid annually and the next coupon is due in one year. Using the
Treasury spot rates given in the table below, what is the price of
the coupon bond? (Round to nearest cent.)
Treasury Spot Rates
Term
Rate
t=1
9.55%
t=2
5.42%
t=3
3.78%

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