Question
a 10 year semi annual payment bond with a par value of $1000 has a 7% coupon annual rate. currently this bong is selling at
a 10 year semi annual payment bond with a par value of $1000 has a 7% coupon annual rate. currently this bong is selling at par. use the above information to answer the following questions.
a. what is the duration of this par bond?
b. if the federal reserve announces a QE and therefore interest rates unexpecdetaly fall. this bond YTM drops by 100 basis points . what is the new duration?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Valuation Measuring and managing the values of companies
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
5th edition
978-0470424650, 9780470889930, 470424656, 470889934, 978-047042470
