Question

Show all work please. a) What is the duration of a four-year semiannual coupon bond with...

Show all work please.

a) What is the duration of a four-year semiannual coupon bond with a 6 percent coupon rate selling at par?

b) What is the duration of a three-year semiannual coupon bond with a 6 percent coupon rate selling at par?

c) What is the duration of a two-year semiannual coupon bond with a 6 percent coupon rate selling at par?

d) Using these results, what conclusions can you draw about the relationship between duration and maturity?

Homework Answers

Answer #1

ANSWER IN THE IMAGE((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

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
Consider the following. a. What is the duration of a four-year Treasury bond with a 11...
Consider the following. a. What is the duration of a four-year Treasury bond with a 11 percent semiannual coupon selling at par? b. What is the duration of a three-year Treasury bond with a 11 percent semiannual coupon selling at par? c. What is the duration of a two-year Treasury bond with a 11 percent semiannual coupon selling at par? Please show work using Duration Equation, not excel.
Consider the following. a. What is the duration of a four-year Treasury bond with a 8...
Consider the following. a. What is the duration of a four-year Treasury bond with a 8 percent semiannual coupon selling at par? b. What is the duration of a three-year Treasury bond with a 8 percent semiannual coupon selling at par? c. What is the duration of a two-year Treasury bond with a 8 percent semiannual coupon selling at par? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a Duration of...
Suppose that a zero coupon bond selling at $1,000 par has a duration of four years....
Suppose that a zero coupon bond selling at $1,000 par has a duration of four years. If interest rates increase from 6 percent to 7 percent annually, the value of the bond will fall by what amount using Equation 6.14? Use semiannual compounding. Then, use the PV formula to determine the actual price of the bond at 7 percent. What is the difference? Why is there a difference?
Calculate the duration of a 2-year bond with 8% semiannual coupon selling at par if interest...
Calculate the duration of a 2-year bond with 8% semiannual coupon selling at par if interest rate decreases by 1 percentage point,by how much will the price of the bond change, based on the Duration model?
What the Approximate Duration of 20 year bond, making semiannual coupon payments, with a coupon rate...
What the Approximate Duration of 20 year bond, making semiannual coupon payments, with a coupon rate of 5and a current price of 70.31 per 100 of par value, considering a 50 bps change in the discount rate?
a. What is the duration of a two-year bond that pays an annual coupon of 11.2...
a. What is the duration of a two-year bond that pays an annual coupon of 11.2 percent and has a current yield to maturity of 13.2 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616)) b. What is the duration of a two-year zero-coupon bond that is yielding 11.5 percent? Use $1,000 as the face value. *please show using financial calculator if possible*
Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury bond with three years to maturity...
Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury bond with three years to maturity (YTM) has a coupon rate of 6%. The yield to maturity of the bond is 11.0%. Using this information and ignoring the other costs involved, calculate the value of the Treasury bond. Please show your calculations.
Please show how to solve using EXCEL ONLY. 10. Calculate the duration of a $1,000, 12‐year...
Please show how to solve using EXCEL ONLY. 10. Calculate the duration of a $1,000, 12‐year zero coupon bond using annual compounding and a current market rate of 9 percent. 12. Calculate the duration for a $1,000, 4‐year bond with a 4.5 percent annual coupon, currently selling at par. Use the bond’s duration to estimate the percentage change in the bond’s price for a decrease in the market interest rate to 3.5 percent. How different is your answer from the...
Please explain how to do A&B in excel. a) What is the value of a 20-year,...
Please explain how to do A&B in excel. a) What is the value of a 20-year, 12% semiannual coupon bond with a par value of $1000 if its required rate of return is 8%? b) What is the yield to maturity on an 8-year, 8% semiannual coupon bond selling for $900? What is the yield to maturity if the same 8-year, 8% semiannual coupon bond is selling for $1200? c) Draw a “normal” yield curve and explain the difference between...
What is the duration of a four year bond with 10 percent coupon paid annually and...
What is the duration of a four year bond with 10 percent coupon paid annually and 8 percent rate of return? Assume Face value equals $1,000.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT