A 9-year bond has a semi-annual yield of 5% and a duration of 7.906 in half-years....

Question

Question

A 9-year bond has a semi-annual yield of 5% and a duration of 7.906 in half-years. If the semi-annual market yield changes by

Answer 1

Answer #1

Percentage change in bond price = -duration * percentage change in yield

In this case, the yield and duration are both given in half-year terms, hence no adjustment is required.

Percentage change in bond price = - 7.906 * 0.30%

Percentage change in bond price = - 2.37%

Answer 2

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