Question
A 20 year 12% bond has duration of 9.09 years. The bond is currently selling at a YTM of 10%. What will be the bond
A 20 year 12% bond has duration of 9.09 years. The bond is currently selling at a YTM of 10%. What will be the bond price if the YTM falls to 7%? What prices for the bond at these new yields would be predicted by the duration rule? What is the percentage error?
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Introductory Econometrics For Finance
Authors: Chris Brooks
2nd Edition
052169468X, 9780521694681
