Question

Consider a four year annual bond paying a 8.5% coupon, with a yield to maturity of...

Consider a four year annual bond paying a 8.5% coupon, with a yield to maturity of 9.3%. What is the duration of the bond? A. 3.831 B. 3.785 C. 3.614 D. 3.548

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 20-year, 6.500% annual payment bond settles on a coupon date. The bond's yield to maturity...
A 20-year, 6.500% annual payment bond settles on a coupon date. The bond's yield to maturity is 9.400%. (a)   What is the bond’s Macauley Duration (show your work, like you did in problem (16) above.) (b) What is the bond’s approximate modified duration? Use yield changes of +/- 30 bps around the yield to maturity for your calculations. (c) Calculate the approximate convexity for the bond. (d) Calculate the change in the full bond price for a 40 bps change...
a) First, consider a 10 year bond with a coupon rate of 7% and annual coupon...
a) First, consider a 10 year bond with a coupon rate of 7% and annual coupon payments. Draw a graph showing the relationship between the price and the interest on this bond. The price should be on the y- axis and the interest rate on the x-axis. To compute the various prices, consider interest rates between 2% and 12% (use 0.5% increments). So your x-axis should go from 2%, then 2.5% ... until 11.5% and then 12%. Is the relationship...
7) What is yield to maturity for a bond paying at 5% annual coupon, 10 years...
7) What is yield to maturity for a bond paying at 5% annual coupon, 10 years until maturity and sells for $900? Assume par =$1000. a) 5.0% b) 6.4% c)8.6% d)9.9% 8) What will be the monthly payment on the home mortgage of $750,000 at 7% APR interest, to be paid over 20 years. A) $4994 b) $5391 c) $5815 d) $6789
Consider two bonds, a 3-year bond paying an annual coupon of 3%, and a 20-year bond,...
Consider two bonds, a 3-year bond paying an annual coupon of 3%, and a 20-year bond, also with an annual coupon of 3%. Both bonds currently sell at par value. Now suppose that interest rates rise and the yield to maturity of the two bonds increases to 6%. a. What is the new price of the 3-year bond? (Round your answer to 2 decimal places.) b. What is the new price of the 20-year bond? (Round your answer to 2...
Consider a coupon paying bond with the price $998.25 and maturity in 6 month and a...
Consider a coupon paying bond with the price $998.25 and maturity in 6 month and a coupon paying bond with the price $1004.98 and maturity in 1 year. The annual coupon rate and the par value are the same for each bond and equal to 4% and $1000, respectively. Answer the following two questions. Find continuously compounded 6-month zero rate Select one: a. 3.91% b. 5.11% c. 3.33% d. 4.31%
Consider a 2-year bond with 6% coupon rate and a yield to maturity of 7%. Calculate...
Consider a 2-year bond with 6% coupon rate and a yield to maturity of 7%. Calculate the duration of the bond.
A 30-year maturity 10% coupon bond paying coupons semiannually is callable in 10 years at a...
A 30-year maturity 10% coupon bond paying coupons semiannually is callable in 10 years at a call price of $1,200. The bond currently sells at a yield to maturity of 5%. a) What is the selling price of the bond at present? b) What is the yield to call? c) Suppose that the investor decided to hold the bond only for 5 years. The reinvestment rate of coupon payments is 8.5%. The forecasted yield to maturity by the end of...
Suppose a​ ten-year, $ 1000 bond with an 8.5 % coupon rate and semiannual coupons is...
Suppose a​ ten-year, $ 1000 bond with an 8.5 % coupon rate and semiannual coupons is trading for $ 1035.72 . a. What is the​ bond's yield to maturity​ (expressed as an APR with semiannual​ compounding)? b. If the​ bond's yield to maturity changes to 9.3 % APR, what will be the​ bond's price?
A 5.60% annual coupon, 5-year bond has a yield to maturity of 9.50%. Assuming the par...
A 5.60% annual coupon, 5-year bond has a yield to maturity of 9.50%. Assuming the par value is $1,000 and the yield to maturity is expected not to change over the next year. a) What should the price of the bond be today? b) What is the bond price expected to be in one year? c) What is the expected Capital Gains Yield for this bond? d) What is the expected Current Yield for this bond?
A 30-year maturity bond making annual coupon payments with a coupon rate of 10.2% has duration...
A 30-year maturity bond making annual coupon payments with a coupon rate of 10.2% has duration of 11.03 years and convexity of 176.83. The bond currently sells at a yield to maturity of 9%. a. Find the price of the bond if its yield to maturity falls to 8%. b. What price would be predicted by the duration rule? c. What price would be predicted by the duration-with-convexity rule? d-1. What is the percent error for each rule? d-2. What...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT