A bond currently sells for $1,050, which gives it a YTM of 6%. Suppose that if the

Question:

A bond currently sells for $1,050, which gives it a YTM of 6%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,025. What is the duration of this bond?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

See More Books

Question Posted: May 14, 2012 05:26 AM

See More Questions

A bond currently sells for $950 based on a par value of $1000 and promises $100 in interest for 3 years before being retired. Yields to maturity on comparable-quality securities are currently at 12%....
A 30 year 9% coupon bond currently sells for $100. A 30 year 3% coupon bond with exactly the same coupon dates and maturity currently sells for $50. both bonds have $100 as the principal at maturity....
A 10-year, 8% coupon bond currently sells for $90. A 10-year, 4% coupon bond currently sells for $80. What is the 10-year zero rate? (Hint: Consider taking a long position in two of the 4% coupon...
Cost information for Lake County Library is as follows. In addition to directly traceable costs, the library incurred $24,000 for a building lease. REQUIRED A. Allocate to departments any costs that...
a. Use the Dynamic Mattress model (Tables 29.8 - 29.10) and the spreadsheets on the book's website at www.mhhe.com/bma to produce pro forma income statements, balance sheets, and statements of cash...
Hi-Tech Incorporated produces two different products with the following monthly data. Assume the sales mix remains the same at all levels of sales. Required Round your answers to the nearest...
Do I have a few intelligent questions in mind to ask the interviewer? LO.1
Roper Corporation reports the following results for the current year: Gross profits on sales . $80,000 Short-term capital gain ... 40,000 Long-term capital gain 25,000 Dividends from 25%-owned...
Gaya Coyles dream is to buy her very own apartment unit in Syd. After a 6-month search, shes ecstatic to finally find the perfect unit, a brand new 2-bedroom unit located in Bankstown. She made an...
Three couple moments act on the pipe assembly. Determine the magnitudes of M 2 and M 3 so that the resultant couple moment is zero. My 0-2 120 120 120* M M-80N m
Suppose you have $500 in savings when the price level index is at 100. (a) If inflation pushes the price level up by 10 percent, what will be the real value of your savings? (b) What is the real...
How long will it take your $10,000 to double in value if it earns 5% annually?
Describe how a biparental pattern of extranuclear inheritance would resemble a Mendelian pattern of inheritance for a particular gene. How would they differ?
At the Business Level there are a couple main strategies that companies use- Cost Leadership and Differentiation. What is the difference between them? Share some examples of companies or specific...
https://youtu.be/c_Eutci7ack After watching the video, what are your thoughts on Power? Would you want to have this Power ? Why would you not want this Power? If you are a manager or want to be a...
Find anti derivative of ( 2 t - 4 + 3 ^ ( 1 / 2 ) ) / t ^ ( 1 / 2 )
How Adidas is using creative narratives to build brand equity Adidas' outdoor division is drawing on the expertise of its wider athletic business while at the same time flexing its creative muscle to...
May I have a word" Alysha Stark popped her head in at the corner office of the Managing Director Mike O' Connor. It's early on a Monday morning. When Alysha, his star Director, starts something this...
understand the balanced scorecard and its applications LO1
In Exercises discuss the continuity of each function. f(x) -3 1 x - 4 y 3 2 -1 -2 -3+ 3 X
Classify each number in Problems 1116 as rational or irrational. If it is rational, write it without a square root symbol. If it is irrational, approximate it with a rational number correct to the...
Using the historical risk premiums over the 19572012 period as your guide, if the current risk-free interest rate is 3 percent, what is your estimate of the expected annual HPR on the S&P/TSX...
Suppose that your risky portfolio includes the following investments in the given proportions: Stock A: ...... 27 percent Stock B: ...... 33 percent Stock C: ...... 40 percent What are the investment...
Suppose that your risky portfolio includes the following investments in the given proportions: Stock A: ...... 27 percent Stock B: ...... 33 percent Stock C: ...... 40 percent What are the investment...
A zero-coupon bond bears a higher interest rate risk than a coupon-paying bond, given other bond characteristics are equal. True False
Company management decided to restructure its balance sheet. Current long term debt of 8 mio euros will be increased to 20 mio euros. Interest for the debt is 4%. Borrowed 12 mio euros will used to...
Susan loans 10000 to Jim. Jim repays the loan with yearly instalments at the end of each year. Interest is expected to be 5% the first five years, and 10% the last five years. Calculate the...

A bond currently sells for $1,050, which gives it a YTM of 6%. Suppose that if the

Question:

Step by Step Answer:

Given information Par Value 100000 YT...View the full answer

Fundamentals of Corporate Finance

Students also viewed these Accounting questions