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Question 5 1.25 points Save Answer A bond with annual coupon payments has the following characteristics,...
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?...
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?...
7. Find the Macaulay duration of a 6% coupon bond making annual coupon payments if it...
7. Find the Macaulay duration of a 6% coupon bond making annual coupon payments if it has three years until maturity and has a yield to maturity of 6%. ____________ What is the Macaulay duration if the yield to maturity is 10%? ______________
Question 9 Homework • Unanswered An Apple annual coupon bond has a coupon rate of 5.7%,...
Question 9 Homework • Unanswered An Apple annual coupon bond has a coupon rate of 5.7%, face value of $1,000, and 4 years to maturity. If its yield to maturity is 5.7%, what is its Macaulay Duration? Answer in years, rounded to three decimal places. Numeric Answer: Unanswered 2 attempts left Submit Question 10 Homework Unanswered A T-bond with semi-annual coupons has a coupon rate of 6%, face value of $1,000, and 2 years to maturity. If its yield to...
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...
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.
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.
1. An investor purchases an annual coupon bond with a 6% coupon rate and exactly 20...
1. An investor purchases an annual coupon bond with a 6% coupon rate and exactly 20 years remaining until maturity at a price equal to par value. The investor’s investment horizon is eight years. The approximate modified duration of the bond is 11.470 years. What is the duration gap at the time of purchase? (Hint: use approximate Macaulay duration to calculate the duration gap) 2. An investor plans to retire in 10 years. As part of the retirement portfolio, the...
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...
a. An investor buys a 5 % annual coupon payment bond with three years to maturity....
a. An investor buys a 5 % annual coupon payment bond with three years to maturity. The bond has a yield-to-maturity of 9%. The par value is $1000. i. Determine the market price of the bond. (2 marks) ii. Calculate the bond's duration. (3 marks) b.A bond portfolio consists of the following three annual coupon payment bonds. Prices are per 100 of par value. Modified Duration Yield-to- Coupon (%) Bond Maturity Market (years) Price Maturity (%) (years) 5.23 7.98 Value...
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?...
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?...
Question 9 Homework • Unanswered An Apple annual coupon bond has a coupon rate of 5.7%, face value of $1,000, and 4 years to maturity. If its yield to maturity is 5.7%, what is its Macaulay Duration? Answer in years, rounded to three decimal places. Numeric Answer: Unanswered 2 attempts left Submit Question 10 Homework Unanswered A T-bond with semi-annual coupons has a coupon rate of 6%, face value of $1,000, and 2 years to maturity. If its yield to...
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...
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...
a. An investor buys a 5 % annual coupon payment bond with three years to maturity. The bond has a yield-to-maturity of 9%. The par value is $1000. i. Determine the market price of the bond. (2 marks) ii. Calculate the bond's duration. (3 marks) b.A bond portfolio consists of the following three annual coupon payment bonds. Prices are per 100 of par value. Modified Duration Yield-to- Coupon (%) Bond Maturity Market (years) Price Maturity (%) (years) 5.23 7.98 Value...
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