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Because coupon payments causes the cashflow wieghted average time for coupon bond to be lower than that of zero coupon bond
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The duration of a coupon bond is: Multiple Choice Ο equal to its number of payments....
A bond pays annual interest. Its coupon rate is 10.7%. Its value at maturity is $1,000....
A bond pays annual interest. Its coupon rate is 10.7%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 7.7%. The duration of this bond is years. Multiple Choice 04.00
38. The duration of a $1000, 2-year, 6% coupon bond (interest paid annually) is _____...
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.
A coupon bond that pays interest annually has a market value equal to its par value...
A coupon bond that pays interest annually has a market value equal to its par value of $1,000. It matures in five years, and has a coupon rate of 9%. The yield to maturity on this bond is what?
Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon...
Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon rate of 8.60%, 5 years to maturity and a yield to maturity of 9.20% Find the equilavent years to maturity of a zero-coupon bond to one that has a coupon rate of 660% (annual coupons) 10 years to maturity, and a yield to maturity 3 of 6.00%. Find the approximate percentage change in the price of a bond due to a 10 basis point...
When interest rates shift, the price of zero coupon bonds are volatile Multiple Choice more; if...
When interest rates shift, the price of zero coupon bonds are volatile Multiple Choice more; if they have a short maturity rather than a long maturity not; because their duration always matches their maturity equally; regardless of their maturity. less; than coupon bonds of the same maturity. more; than coupon bonds of the same maturity. What is the duration of a bond with four years to maturity and a coupon of 9.5 percent paid annuallyif the bond sells at par?...
a. A 6% coupon bond paying interest annually has a modified duration of 7 years, sells...
a. A 6% coupon bond paying interest annually has a modified duration of 7 years, sells for $820, and is priced at a yield to maturity of 9%. If the YTM decreases to 8%, what is the predicted change in price ($) using the duration concept? (2 marks) b. A bond with annual coupon payments has a coupon rate of 6%, yield to maturity of 7 % , and Macaulay duration of 12 years. What is the bond's modified duration?...
Consider a 2-year coupon bond that pays coupon annually with a coupon rate of 3%, face...
Consider a 2-year coupon bond that pays coupon annually with a coupon rate of 3%, face value $1000, a yield to maturity of 4%. (a) What is the approximated bond price estimated by both duration and convexity if the yield is increased by 0.5%? (b) Suppose you purchased 1 unit of the above coupon bond mentioned above and is worried if the interest rate will increase. You are considering taking short position on a zero coupon bond. The zero coupon...
Question 5 (4 points) I have two bonds in my portfolio. Bond A pays me an...
Question 5 (4 points) I have two bonds in my portfolio. Bond A pays me an annual coupon of $90 with a face (maturity) value of $1,000. Bond A matures in 4 years. I also have Bond B, a zero coupon bond that matures on the same day that Bond A matures on. This is the day I plan to retire. Which of the following statements is correct? My required rate of return is 8%. The duration of both bonds...
a. Find the duration of a 7% coupon bond making annual coupon payments if it has...
a. Find the duration of a 7% coupon bond making annual coupon payments if it has three years until maturity and has a yield to maturity of 7%. Note: The face value of the bond is $1,000. (Do not round intermediate calculations. Round your answers to 3 decimal places.) 7% ΥTM years b. What is the duration if the yield to maturity is 8.4%? Note: The face value of the bond is $1,000. (Do not round intermediate calculations. Round your...
Find the duration of a 6% coupon bond making semiannually coupon payments if it has three...
Find the duration of a 6% coupon bond making semiannually coupon payments if it has three years until maturity and has a yield to maturity of 6%. What is the duration if the yield to maturity is 10%? Note: The face value of the bond is $100. (Do not round intermediate calculations. Round your answers to 4 decimal places.) Duration 6% YTM years 10% YTM years
A bond pays annual interest. Its coupon rate is 10.7%. Its value at maturity is $1,000. It matures in 4 years. Its yield to maturity is currently 7.7%. The duration of this bond is years. Multiple Choice 04.00
Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon rate of 8.60%, 5 years to maturity and a yield to maturity of 9.20% Find the equilavent years to maturity of a zero-coupon bond to one that has a coupon rate of 660% (annual coupons) 10 years to maturity, and a yield to maturity 3 of 6.00%. Find the approximate percentage change in the price of a bond due to a 10 basis point...
When interest rates shift, the price of zero coupon bonds are volatile Multiple Choice more; if they have a short maturity rather than a long maturity not; because their duration always matches their maturity equally; regardless of their maturity. less; than coupon bonds of the same maturity. more; than coupon bonds of the same maturity. What is the duration of a bond with four years to maturity and a coupon of 9.5 percent paid annuallyif the bond sells at par?...
a. A 6% coupon bond paying interest annually has a modified duration of 7 years, sells for $820, and is priced at a yield to maturity of 9%. If the YTM decreases to 8%, what is the predicted change in price ($) using the duration concept? (2 marks) b. A bond with annual coupon payments has a coupon rate of 6%, yield to maturity of 7 % , and Macaulay duration of 12 years. What is the bond's modified duration?...
Question 5 (4 points) I have two bonds in my portfolio. Bond A pays me an annual coupon of $90 with a face (maturity) value of $1,000. Bond A matures in 4 years. I also have Bond B, a zero coupon bond that matures on the same day that Bond A matures on. This is the day I plan to retire. Which of the following statements is correct? My required rate of return is 8%. The duration of both bonds...
a. Find the duration of a 7% coupon bond making annual coupon payments if it has three years until maturity and has a yield to maturity of 7%. Note: The face value of the bond is $1,000. (Do not round intermediate calculations. Round your answers to 3 decimal places.) 7% ΥTM years b. What is the duration if the yield to maturity is 8.4%? Note: The face value of the bond is $1,000. (Do not round intermediate calculations. Round your...
Find the duration of a 6% coupon bond making semiannually coupon payments if it has three years until maturity and has a yield to maturity of 6%. What is the duration if the yield to maturity is 10%? Note: The face value of the bond is $100. (Do not round intermediate calculations. Round your answers to 4 decimal places.) Duration 6% YTM years 10% YTM years
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