A bond is currently selling at $1,025.5, has a yield-to-maturity of 6.46%, and has a duration...
A bond is currently selling at $1,025.5, has a yield-to-maturity of 6.46%, and has a duration of 8. If the yield-to-maturity rises to 6.86%, calculate the new price of the bond.
Homework Answers
% change in price = -duration * change in yield
change in yield = 6.86% - 6.46% = 0.4%
% change in price = -7 * 0.004
% change in price = -0.028 or -2.8%
New price = 1,025.5 ( 1 - 2.8 /100)
New price = $996.79
Add Answer to:
A bond is currently selling at $1,025.5, has a yield-to-maturity
of 6.46%, and has a duration...
A 33-year maturity bond making annual coupon payments with a coupon rate of 15% has duration of 10.8 years and convexity of 1916 . The bond currently sells at a yield to maturity of 8% Required (a) F...
A 33-year maturity bond making annual coupon payments with a coupon rate of 15% has duration of 10.8 years and convexity of 1916 . The bond currently sells at a yield to maturity of 8% Required (a) Find the price of the bond if its yield to maturity falls to 7% or rises to 9%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Yield to maturity of 7% Yield to maturity of 9% (b)...
A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield)...
A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 139.2 and modified duration of 11.34 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration--12.30 years--but considerably higher convexity of 272.9. a. Suppose the yield to maturity on both bonds increases to 9%. What will be the actual percentage capital loss on each bond? il...
A 13.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield)...
A 13.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 161.9 and modified duration of 12.27 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration-12.30 years-but considerabl higher convexity of 272.9 a. Suppose the yield to maturity on both bonds increases to 9%. What will be the actual percentage capital loss on each bond? What...
A 13.05-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield)...
A 13.05-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 1572 and modified duration of 12.08 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration--12.30 years—but considerably higher convexity of 272.9. a. Suppose the yield to maturity on both bonds increases to 9%. 1. What will be the actual percentage capital loss on each bond?...
1) The yield on a corporate bond is 12%, and it is currently selling at par....
1) The yield on a corporate bond is 12%, and it is currently selling at par. The marginal tax rate is 20%. A par value municipal bond with a coupon rate of 10% is available. Which security is a better buy? 2) Following are the features of a mortgage loan: Loan amount $100,000 Nominal interest rate 6.2% Term – 30 years (Fixed) Required: (a) Calculate the required monthly mortgage payment. (b) Calculate the amount of interest and the repayment of...
An 8% coupon bond with 3 years to maturity has a yield of 7%. Assume that...
An 8% coupon bond with 3 years to maturity has a yield of 7%. Assume that coupon is paid semi-annually and face value is $1,000. (a) Calculate the price of the bond. (Keep 2 decimal places, e.g. 90.12) (b) Calculate the duration of the bond. (Keep 4 decimal places, e.g. 5.1234) (c) Calculate this bond's modified duration. (Keep 4 decimal places, e.g. 5.1234) (d) Assume that the bond's yield to maturity increases from 7% to 7.2%, estimate the new price...
11. A bond makes annual coupon payments, is currently worth $995, and has a duration of...
11. A bond makes annual coupon payments, is currently worth $995, and has a duration of 4.77 years. The bond's yield-to-maturity is currently 9%. If the rate on same-risk bonds suddenly changes to 8.52%, then what does duration predict the new price of the bond to be? Round your answer to the nearest penny.
Return to question A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8%...
Return to question A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 1392 and modified duration of 11.34 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration -12.30 years--but considerably higher convexity of 272.9. 1.25 points a. Suppose the yield to maturity on both bonds increases to 9% IWhat will be the actual percentage...
Question 1 A 12.58-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective...
Question 1 A 12.58-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 146.5 and modified duration of 11.65 years. A 30-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration—-11.79 years—-but considerably higher convexity of 231.2. a. Suppose the yield to maturity on both bonds increases to 9%. What will be the actual percentage capital loss on each...
11. A bond makes annual coupon payments, is currently worth $971, and has a duration of...
11. A bond makes annual coupon payments, is currently worth $971, and has a duration of 5.39 years. The bond's yield-to-maturity is currently 9%. If the rate on same-risk bonds suddenly changes to 8.51%, then what does duration predict the new price of the bond to be? Round your answer to the nearest penny. HINT:Calculate the predicted percentage price change and apply that to the bond's old price of $971.
A 33-year maturity bond making annual coupon payments with a coupon rate of 15% has duration of 10.8 years and convexity of 1916 . The bond currently sells at a yield to maturity of 8% Required (a) Find the price of the bond if its yield to maturity falls to 7% or rises to 9%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Yield to maturity of 7% Yield to maturity of 9% (b)...
A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 139.2 and modified duration of 11.34 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration--12.30 years--but considerably higher convexity of 272.9. a. Suppose the yield to maturity on both bonds increases to 9%. What will be the actual percentage capital loss on each bond? il...
A 13.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 161.9 and modified duration of 12.27 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration-12.30 years-but considerabl higher convexity of 272.9 a. Suppose the yield to maturity on both bonds increases to 9%. What will be the actual percentage capital loss on each bond? What...
A 13.05-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 1572 and modified duration of 12.08 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration--12.30 years—but considerably higher convexity of 272.9. a. Suppose the yield to maturity on both bonds increases to 9%. 1. What will be the actual percentage capital loss on each bond?...
Return to question A 12.25-year maturity zero-coupon bond selling at a yield to maturity of 8% (effective annual yield) has convexity of 1392 and modified duration of 11.34 years. A 40-year maturity 6% coupon bond making annual coupon payments also selling at a yield to maturity of 8% has nearly identical modified duration -12.30 years--but considerably higher convexity of 272.9. 1.25 points a. Suppose the yield to maturity on both bonds increases to 9% IWhat will be the actual percentage...
Most questions answered within 3 hours.
-
Find the following probabilities for X = pulse rates of
group of people, for which the...
asked 4 minutes ago -
This statement is TRUE regarding abstract expressionism:
It greatly influened Impressionist artists
It was considered Germany’s...
asked 7 minutes ago -
Implement the function flip_dict which takes in a dictionary and
returns a similar dictionary where the...
asked 11 minutes ago -
In a 1999-2000 NHANES report, researchers estimated that 64
percent of U.S. adults ages 20-74 were...
asked 34 minutes ago -
A resistance R and a 0.5H inductance are in series
across a 57Hz ac voltage. The...
asked 40 minutes ago -
Chapter 3:
Critical Thinking Question 10: Give examples of active and
passive voice. Explain when each...
asked 44 minutes ago -
reason why u pick that choice
1. an adolescent who is currently exploring different options
for...
asked 46 minutes ago -
Burns Company's 2019 and 2018 balance sheet presented the
following data for equipment. Equipment 12/31/2019 $325,000...
asked 49 minutes ago -
List one example of each: one micro and one macro perspective of an
institution from a...
asked 1 hour ago -
Which type of memory management divides memory into unequally
sized blocks (multiple choices may or may...
asked 1 hour ago -
1) In the mechanism for peptide bond formation, what acts as the
initial electrophile?
2) Consider...
asked 1 hour ago -
Can you explain step by step.
Assume that we want to construct a confidence interval. Do...
asked 1 hour ago