Question
A $1000 par semiannual-pay bond has a current price of $976 has a modified duration of 4.92. Suppose the yield on the bond suddenly increases
A $1000 par semiannual-pay bond has a current price of $976 has a modified duration of 4.92. Suppose the yield on the bond suddenly increases by 0.45 percent. Use duration to estimate the new price of the bond. Answer to two decimals. Carry intermediate calcs. to four decimals.
Assume 1,000 par value and semi annual compounding
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Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
978-1439051764, 1111783659, 9780324594690, 1439051763, 9781111783655, 324594690, 978-1111021573
