1. There is a 10%, 13 year note bond which has a ytm of 9%. The ytm alters by half a percent down. By how much does the price alter? If the ytm drops by 3%, by how much does the price change, if the convexity is 40? Use formula to show work
T-Mobile LTE 10:00 AM 89%- Expert Q&A I. There is a 10%, 13 year note bond which has a ytrm of 9%. The ytm alters by half a percent down. By how much does the price alter? If the ytm drops by 3%, by how much does the price change? What is the exact percentage change of the bond in the 2 cases? l. There is a par 30 year, 6% bond. What is the % alteration, if the ytm...
There is a 9%, 23 year note bond which has a ytm of 9%. The ytm alters by one percent down. By how much does the price alter? If the ytm drops by 2%, by how much does the price change? What is the exact percentage change of the bond in the 2 cases?
Bond Y has a 30-year maturity, an 8% coupon, and sells at an initial yield-to-maturity (YTM) of 8 percent. The modified duration of Bond Y is 11.26 years and its convexity measure equals 212.40. If the bond's yield increases from 8% to 10% how much on a percentage basis is the Duration-With- Convexity Rule more accurate (Part 1)? Briefly explain the concept of Convexity Measure as it relates to Bond Y (Part 2):
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)...
18. What is the duration of a 10 year, 4% coupon bond with a 4% YTM (face value=1000)? if its YTM drops by 0.25%, what happens to the bond’s price?
A 4-year 12% coupon bond has a yield of 10%. (a) What are its Macaulay Duration, Modified duration, and convexity (I do not mean effective convexity) (b) What is the actual price change, Modified Duration predicted price change and Modified Duration + convexity predicted change in price for an increase of 50 basis point in the yield. Assume a flat term structure before and after the increase and annual coupons. (Note: For convexity do not use effective convexity measure)
You are about to purchase a 10-year par bond with a 5% coupon rate paid annually. 1.What are the duration and the convexity of this bond? [4 marks] Using first derivative with formula Assume that right after you purchase the bond an economic announcement drives the YTM to 7%. What is the new price of the bond? [1 mark] What price would be predicted by the duration rule after the YTM increases to 7%? Is this answer the same as...
Suppose you buy a 2 year 5% bond that has a yield to maturity (YTM) of 6%. What is the price of the bond? Please show work with the following formula: P= C[1-1/(1+r)^n/r] + F/(1+r)^n
A 30-year maturity bond making annual coupon payments with a coupon rate of 15.5% has duration of 9.96 years and convexity of 144.6. The bond currently sells at a yield to maturity of 10%. a. Find the price of the bond if its yield to maturity falls to 9%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price of the bond $ b. What price would be predicted by the duration rule? (Do not round intermediate...
2) Assume that you have a 10 year Treasury Bond with a yield of 2.76%, coupon rate of 2.35%, paying annual coupon payments. Assume the face value of the bond is $1,000. Shock the yield on the bond by 100 basis points up and down to determine the approximate duration and approximate convexity of the bond. Determine the approximate percentage change in the price of the bond because of the effects of duration and convexity when there is a 100...