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1) You own $25,000 of a Whamol Corp bond. The coupon of the bond is 4% and it is due 4/15/25. The Bond's McCaulay duration
1) You own $25,000 of a Whamol Corp bond. The coupon of the bond is 4% and it is due 4/15/25. The Bond's McCaulay duration is 3.5. The bond is currently prices at 114.15. If interest rates rise by 1%, how much with the price of the bond change? (1 Point) Use the information on the following bonds to answer the next three questions: (3 points) Bond A 0% 4/15/40 YTM 2.50% Bond B 8% 4/15/30 YTM 3.00% Bond C 2.5% 4/15/40 YTM 2.50% 2) What is the duration (in years) of Bond A (round to the nearest year)? 3) If interest rates rise by 1%, which bond's price will move the most? 4) If interest rate drop by 1% which bond's price will move the least? 5) A Perpetuity has a yield of 4%. What is its duration? (1 point) 6) Bo N. D. Geek is looking at the following bonds: ww 5% 4/15/35 Wrigley 3% 4/15/35 Microsoft 8% 4/15/35 a) If the current yield for all three bonds is 4%, calculate the current price of each bond (3 points) b) If the Microsoft bond was callable in 2025 at par, assuming interest rates do not change from current levels, would the bond still be outstanding at maturity? (1 point)
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