The effective duration assuming a 50 basis point change in interest rates is 7.3427 using Macualay Duration formulae.
Glazer bought a 10-year bond, with a 6% coupon paid semi-annually. He paid $1,078 for the...
QUESTION 29 Peter has a fixed income portfolio that consists of Bond A, Bond B, and Bond C. The bonds have durations of 4,6 and 10, respectively. If Peter has 50% invested in Bond A and 25% invested in each of the other two bonds, what is the duration for the portfolio? Assume that the correlation between the bonds is 0.5. a. 5.5. b.6.0. O c. 6.7. O d. 7.2. QUESTION 30 Gordon bought a 10-year bond, with a 6%...
Suppose a bond matures in 4 years with a coupon rate of 6% paid semi-annually and a yield-to-maturity of 10%, has a duration of 3.02. Using modified duration, what is the percentage change in price of the bond if the interest rate (ie, yield) decreases by 0.5%? A.-1.44% B.-0.50% OC. 0.50% CD. 1 .44%
Consider a three-year bond with 6% annual coupon (paid semi-annually). Suppose the yield on the bond is 8% per year with continuous compounding. What is the duration of the bond (in years)? (required precision: 0.01 +/- 0.01)
38. The duration of a $1000, 2-year, 6% coupon bond (interest paid annually) is _____ when market rates are 8%. The 8% PV factors are: .9259 1 YR; .8573 2 YR a. 2.036 b. 1.971 c. 1.94 d. 1.856 39. As bond maturity _________, so does the _________ and ________. a. decreases; coupon rate; market price. b. decreases; duration; face value. c. increases; duration; price variability. d. increases; market price; coupon rate.
Consider a three-year bond with 11% annual coupon (paid semi-annually). Suppose the yield on the bond is 7% per year with continuous compounding. What is the duration of the bond (in years)? (required precision: 0.01 +/- 0.01)
6 Consider a 7 year bond with face value $1,000 that pays an 8.4% coupon semi-annually and has a yield-to-maturity of 6.9%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to increase by 0.40% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?)
A 30-year bond has a 9% coupon paid semi-annually and a bond yield of 12%. What is the price of the bond? A. $793.53 B. $1,244.33 C. $1,308.21 D. $1,309.57 E. $757.58 F. $758.34
The duration of a par-value bond with a coupon rate of 8% (paid semi-annually) and a remaining time to maturity of 5 years is closest to a. 5 years b. 4.6 years c. 4.2 years d. 4.0 years e. 3.7 years
What should you pay for a $1,000 10-year 10% Coupon rate bond paid semi-annually, when the required return market rate is 5%? A. $1,000.00 B.$ 885.30 C. $1,389.73
A company issues a ten-year bond at par with a coupon rate of 6.6% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 9.2%. What is the new price of the bond? A. $ 855 B. $ 1,026 C. $ 1,197 D. $1,000