Steel Pier Company has issued bonds that pay semiannually with the following character: Coupon: 10% Yield...
Steel Pier Company has issued bonds that pay semiannually with the following character:
Coupon: 10%
Yield to Maturity: 10%
Maturity: 10 years
Macaulay Duration: 6.76 years
If the yield to maturity decreases to 8.045%, the expected percentage change in the price of the bond using modified duration would be ________.
A) 12% B) 11% C) 10% D) 13%
Answer: 12%
Please explain
Homework Answers
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Steel Pier Company has issued bonds that pay semiannually with
the following character:
Coupon: 10%
Yield...
Problem 13-03 The Clarence Corporation has issued bonds that pay semiannually with the following characteristics: Coupon...
Problem 13-03 The Clarence Corporation has issued bonds that pay semiannually with the following characteristics: Coupon Yield to Maturity Maturity Macaulay Duration 10% 10% 13 7.55 years a. Calculate modified duration using the information provided. Do not round intermediate calculations. Round your answer to two decimal places. Use only the data provided in the table above (in the problem statement) for your calculations. years b. What is a better measure when calculating the bond's sensitivity to changes in interest rates?...
a. A 6% coupon bond paying interest annually has a modified duration of 7 years, sells...
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Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon...
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A bond has just been issued. The bond has an annual coupon rate of 9% and...
A bond has just been issued. The bond has an annual coupon rate of 9% and coupons are paid annually. The bond has a face value of $1,000 and will mature in 10 years. The bond’s yield to maturity is 12%. Calculate the price of the bond at the yield to maturity of 12%. Calculate a new price for the bond if the yield to maturity decreases to 10.5%. Calculate the actual change in the bond’s price as the yield...
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Tropical Dreams bonds have a duration of 6.8 years and a modified duration of 6.50. If the yield is expected to decrease by 0.1%, what is the expected percentage change in the price of the bonds issued by Tropical Dreams? The yield to maturity is 9% and the bonds mature in ten years. The bonds carry a 9% coupon, paid semiannually. The par value is $1,000.
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Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 12 years to maturity, and a coupon rate of 7 percent paid annuallly. If the yield to maturity is 11 percent, what is the current price of the bond?
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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 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...
2. Tropical Dreams bonds have a duration of 6.8 years and a modified duration of 6.50. If the yield is expected to decrease by 0.1%, what is the expected percentage change in the price of the bonds issued by Tropical Dreams? The yield to maturity is 9% and the bonds mature in ten years. The bonds carry a 9% coupon, paid semiannually. The par value is $1,000
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