A bond is currently trading for 98.72 per 100 of par value. If the bonds YTM...
A bond is currently trading for 98.72 per 100 of par value. If the bonds YTM rises by 100 basis points, the bonds full price is expected to fall to 93.66. If the bonds YTM decreases by 100 basis points, the bonds full price is expected to increase to 105.78. The bonds approximate modified duration is closest to:
A/ 122.78
B/ 12.28
C/ 6.14
D/ 61.39
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A bond is currently trading for 98.72 per 100 of par value. If the bonds YTM...
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...
16. A portfolio manager owns S 15 million par value of bond ABC. The bond is trading at 80 and has a modified duration of 5. The portfolio manager is considering swapping out of bond ABC and into...
16. A portfolio manager owns S 15 million par value of bond ABC. The bond is trading at 80 and has a modified duration of 5. The portfolio manager is considering swapping out of bond ABC and into bond XYZ. The price of this bond is 85 and it has a modified duration of 4 Answer the below questions. (a) What is the dollar duration of bond ABC per 100-basis-point change in yield? b) What does that mean? Explain e)...
A bond with a par value of $100 is currently trading at a price of $104....
A bond with a par value of $100 is currently trading at a price of $104. The bond has a coupon rate of 4.16%, and it has exactly 10 years remaining until maturity. What is the bond’s current yield? An investor buys a bond with a $100 par value and a 5% coupon rate for $97. The bond pays interest semiannually. Exactly one year later, just after receiving the second coupon payment, the investor sells the bond for $96. What...
Dillard's just issued bonds with a $1,000 par value. The bonds are currently trading at $1,020...
Dillard's just issued bonds with a $1,000 par value. The bonds are currently trading at $1,020 per bond. The bonds have a 7% yield to maturity and pay interest semiannually. The bonds have twenty years to maturity. What is the bond's annual coupon rate? 4.44% 4.91% 17.00% None of the above
What is the modified duration of a three-year $1,000 par value bond with a 5% coupon...
What is the modified duration of a three-year $1,000 par value bond with a 5% coupon paid semi- annually that is priced to yield 4%? 2.61 5.37 2.77 5.65 Question 6 4 pts You own two bonds. You have $2,000,000 in Bond A which has a modified duration of 8.14. You have $2,250,000 in Bond B which has a modified duration of 4.23. If rates rise by 50 basis points, what would be the approximate impact of the value of...
A 5-Year bond is currently yielding 6%. The coupon at issuance was 6.25%. Is the bond...
A 5-Year bond is currently yielding 6%. The coupon at issuance was 6.25%. Is the bond trading at a discount, a premium, or at par? A. Par B. Premium C. Discount D. Not enough information to make a determination Assuming continual compounding, the future value of $100 in two years at an annual rate of 10% would be closest to: A. 120 B. 121 C. 122 D. 123 A bond is currently trading at $98.09. It has a duration of...
A bond with face value = 9,000 currently trades at par. Its Macaulay duration is 5.32...
A bond with face value = 9,000 currently trades at par. Its Macaulay duration is 5.32 years and its convexity is 56.02. Suppose yield currently is 2.74%, and is expected to change to 2.01%. Calculate the approximate dollar change in price using both duration and convexity. Assume annual compounding. Round your answer to 2 decimal places.
Suppose a seven-year, $1,000 bond with a 10.66% coupon rate and semiannual coupons is trading with a yield to maturity of 8.74%. a. Is this bond currently trading at a discount, at par, or at a premuim? Explain. b. If the yield to maturity of the bond
Suppose a seven-year, $1,000 bond with a 10.66% coupon rate and semiannual coupons is trading with a yield to maturity of 8.74%. a. Is this bond currently trading at a discount, at par, or at a premuim? Explain.b. If the yield to maturity of the bond rises to 9.45% (APR with semiannual compounding), at what price will the bond trade?
Question 1 3 pts A bond with face value = 9,000 currently trades at par. Its...
Question 1 3 pts A bond with face value = 9,000 currently trades at par. Its Macaulay duration is 5.21 years and its convexity is 55.05. Suppose yield currently is 3.88%, and is expected to change to 2.12%. Calculate the approximate dollar change in price using both duration and convexity. Assume annual compounding. Round your answer to 2 decimal places.
Question 1 3 pts A bond with face value = 6,000 currently trades at par. Its...
Question 1 3 pts A bond with face value = 6,000 currently trades at par. Its Macaulay duration is 4.49 years and its convexity is 56.88. Suppose yield currently is 2.81%, and is expected to change to 2.07%. Calculate the approximate dollar change in price using both duration and convexity. Assume annual compounding. Round your answer to 2 decimal places.
16. A portfolio manager owns S 15 million par value of bond ABC. The bond is trading at 80 and has a modified duration of 5. The portfolio manager is considering swapping out of bond ABC and into bond XYZ. The price of this bond is 85 and it has a modified duration of 4 Answer the below questions. (a) What is the dollar duration of bond ABC per 100-basis-point change in yield? b) What does that mean? Explain e)...
Dillard's just issued bonds with a $1,000 par value. The bonds are currently trading at $1,020 per bond. The bonds have a 7% yield to maturity and pay interest semiannually. The bonds have twenty years to maturity. What is the bond's annual coupon rate? 4.44% 4.91% 17.00% None of the above
What is the modified duration of a three-year $1,000 par value bond with a 5% coupon paid semi- annually that is priced to yield 4%? 2.61 5.37 2.77 5.65 Question 6 4 pts You own two bonds. You have $2,000,000 in Bond A which has a modified duration of 8.14. You have $2,250,000 in Bond B which has a modified duration of 4.23. If rates rise by 50 basis points, what would be the approximate impact of the value of...
Question 1 3 pts A bond with face value = 9,000 currently trades at par. Its Macaulay duration is 5.21 years and its convexity is 55.05. Suppose yield currently is 3.88%, and is expected to change to 2.12%. Calculate the approximate dollar change in price using both duration and convexity. Assume annual compounding. Round your answer to 2 decimal places.
Question 1 3 pts A bond with face value = 6,000 currently trades at par. Its Macaulay duration is 4.49 years and its convexity is 56.88. Suppose yield currently is 2.81%, and is expected to change to 2.07%. Calculate the approximate dollar change in price using both duration and convexity. Assume annual compounding. Round your answer to 2 decimal places.
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