Jill has a bond that has a maturity of 33 years, a 19 year duration, and a yield to maturity of 6.35%. The market inter...
Jill has a bond that has a maturity of 33 years, a 19 year duration, and a yield to maturity of 6.35%. The market interest rate has gone up by 0.71%. The modified duration is
|
14.17 years. |
||
|
6.35 years. |
||
|
19 years. |
||
|
17.87 years. |
Homework Answers
Option D
Modified Duration=Duration/(1+yield to maturity)=19/1.0635=17.86553832 years
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Jill has a bond that has a maturity of 33 years, a 19 year duration, and a yield to maturity of 6.35%. The market inter...
Sam has a bond that has a maturity of 28 years, a 17 year duration, and a yield to maturity of 8.57%. The change in the...
Sam has a bond that has a maturity of 28 years, a 17 year duration, and a yield to maturity of 8.57%. The change in the level of the market interest rate is 0.57%. The modified duration is ________ and the percentage change in price is ________. 28 years; 8.9% 10.41 years; -.57% 13.17 years; 5.7% 15.66 years; -8.9%
Show Work Please 4. (35 points) A bond with a yield to maturity of 3% and...
Show Work Please
4. (35 points) A bond with a yield to maturity of 3% and a coupon rate of 3% has 3 years re- maining until maturity. Calculate the duration and the modified duration for this bond assuming annual interest payments and a par value of $1,000. Why is the duration of this bond higher than the 3-year 10% coupon bond yielding 10% we looked at in class that had a duration of 2.7 years? If the required market...
A 33-year maturity bond making annual coupon payments with a coupon rate of 15% has duration of 10.8 years and convexity of 1916 . The bond currently sells at a yield to maturity of 8% Required (a) F...
A 33-year maturity bond making annual coupon payments with a coupon rate of 15% has duration of 10.8 years and convexity of 1916 . The bond currently sells at a yield to maturity of 8% Required (a) Find the price of the bond if its yield to maturity falls to 7% or rises to 9%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Yield to maturity of 7% Yield to maturity of 9% (b)...
A bond has a Macaulay duration equal to 9.5 and a yield to maturity of 7.5%....
A bond has a Macaulay duration equal to 9.5 and a yield to maturity of 7.5%. What is the modified duration of this bond? The modified duration of this bond is . (Round to two decimal places.)
A bond has a Macaulay duration equal to 8.5 and a yield to maturity of 6.5%....
A bond has a Macaulay duration equal to 8.5 and a yield to maturity of 6.5%. What is the modified duration of this bond? The modified duration of this bond is(Round to two decimal places.)
Intro A corporate bond has 19 years to maturity, a face value of $1,000, a coupon...
Intro A corporate bond has 19 years to maturity, a face value of $1,000, a coupon rate of 5.5% and pays interest twice a year. The annual market interest rate for similar bonds is 3.3%. - Attempt 1/10 for 9.5 pts. Part 1 What is the price of the bond (in $)? No decimals Submit Part 2 Attempt 1/10 for 9.5 pts. 2 years later, the market interest rate for similar bonds has gone up to 4.3%. What is the...
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?...
What is the duration of a bond with two years to maturity if the bond has...
What is the duration of a bond with two years to maturity if the bond has a coupon rate of 7.5 percent paid semiannually, and the market interest rate is 5.5 percent? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.) Duration
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...
Show Work Please
4. (35 points) A bond with a yield to maturity of 3% and a coupon rate of 3% has 3 years re- maining until maturity. Calculate the duration and the modified duration for this bond assuming annual interest payments and a par value of $1,000. Why is the duration of this bond higher than the 3-year 10% coupon bond yielding 10% we looked at in class that had a duration of 2.7 years? If the required market...
A 33-year maturity bond making annual coupon payments with a coupon rate of 15% has duration of 10.8 years and convexity of 1916 . The bond currently sells at a yield to maturity of 8% Required (a) Find the price of the bond if its yield to maturity falls to 7% or rises to 9%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Yield to maturity of 7% Yield to maturity of 9% (b)...
A bond has a Macaulay duration equal to 9.5 and a yield to maturity of 7.5%. What is the modified duration of this bond? The modified duration of this bond is . (Round to two decimal places.)
A bond has a Macaulay duration equal to 8.5 and a yield to maturity of 6.5%. What is the modified duration of this bond? The modified duration of this bond is(Round to two decimal places.)
Intro A corporate bond has 19 years to maturity, a face value of $1,000, a coupon rate of 5.5% and pays interest twice a year. The annual market interest rate for similar bonds is 3.3%. - Attempt 1/10 for 9.5 pts. Part 1 What is the price of the bond (in $)? No decimals Submit Part 2 Attempt 1/10 for 9.5 pts. 2 years later, the market interest rate for similar bonds has gone up to 4.3%. What is the...
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?...
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...
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