FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A bond has a duration of 6.2, a yield-to-maturity of 4.66%, and convexity of 98.31. If the current bond's price is $1,109.34 what is predicted

A bond has a duration of 6.2, a yield-to-maturity of 4.66%, and convexity of 98.31. If the current bond's price is $1,109.34 what is predicted to be the bond's new price if interest rates suddenly jump upwards by 1.33%? State your answer as a dollar amount with two decimal places.

Step by Step Solution

★★★★★

3.49 Rating (142 Votes )

There are 3 Steps involved in it

Step: 1

To predict the new price of a bond after a sudden change in interest ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials of Investments

Essentials of Investments

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

10th edition

77835425, 978-0077835422

More Books

Students also viewed these Accounting questions

Question

A bond has a duration of 6.954 and the current yield-to-maturity is 4.97%. If the current bond's price is $1,170.74. What is predicted to be the bond's new price if interest rates suddenly jump...

Answered: 1 week ago

Question

★★★★★
5. Discuss the geological classification of rocks. 6. State the chemical classification of rocks. 7. What are the qualities of a good building stones? Discuss them. 8. Write down the properties of...

Answered: 1 week ago

Question

★★★★★
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

Answered: 1 week ago

Question

★★★★★
A copper-zinc alloy has the following properties: Grain diameter (mm) Strength (MPa) 0.015 .................................. 170 MPa 0.025 .................................. 158 MPa 0.035...

Answered: 1 week ago

Question

★★★★★
Beryls Iced Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead and is comparing two options: a. Purchase...

Answered: 1 week ago

Question

★★★★★
For each of the transactions in M4-4. indicate the amounts and direction of effects of the adjusting entry on the elements of the balance sheet and income statement. Using the following format,...

Answered: 1 week ago

Question

★★★★★
1.48 Wettest Cities Are some cities wetter than others? Does Vancouver deserve to be nicknamed "The Wettest City"? These data are the average rainfall in millimetres (mm) for 100 selected cities in...

Answered: 1 week ago

Question

★★★★★
1. Notwithstanding the law as applied, do you believe an employer should be able to change the terms of pension plan qualifications once individuals have begun to avail themselves of the benefits?...

Answered: 1 week ago

Question

★★★★★
Kindly assist with the tabular summary for recording the transactions. Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpe...

Answered: 1 week ago

Question

★★★★★
Identify the fallacies committed in the following dialogue. You should be able to find at least one case of each fallacy presented in this section. Food for Thought "Let's hit the produce section...

Answered: 1 week ago

Question

★★★★★
You are the CEO of Itelanet, Inc. an IT start-up that has been in business for 4 years. (We are at the end of Year 4) Prior investments (Founders and A Round) Founders (Year 0) A Round Investors (End...

Answered: 1 week ago

Question

★★★★★
Thinking about your natural negotiation style, ask yourself: In general, when does your style help you and when does it not help you in negotiation situations? Now, think about how you can translate...

Answered: 1 week ago

Question

★★★★★
There are three (3) columns, the first column is the reduction of prevention costs, second column is progressive reduction of appraisal costs, and the last column is reduction of failure costs. 2.In...

Answered: 1 week ago

Question

★★★★★
( Scenario 1 4 - 1 ) After it launched, PlayWithMe contracted with three major search engines to show its advertisements any time a user searched for certain terms that were closely identified with...

Answered: 1 week ago

Question

★★★★★
There are three different methods commonly used for capturing network data. These are (1) using a network tap, (2) using a SPAN port on a switch, and (3) using a tool built into a network device...

Answered: 1 week ago

Question

★★★★★
Gross amount of invouce is $ 8 5 0 . there is no freight charge. date of invoice is 8 / 4 . terms of invoice are 3 / 1 0 , 2 / 1 5 and n / 3 0 . date of payment is 8 / 1 8 . find the cash discount....

Answered: 1 week ago

Question

★★★★★
Titania Co. sells $400,000 of 12% bonds on June 1, 2025. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2029. The bonds yield 10%. On October 1, 2026, Titania...

Answered: 1 week ago

Question

★★★★★
You continue to work in the corporate office for a nationwide convenience store franchise that operates nearly 10,000 stores. The per- store daily customer count (i.e., the mean number of customers...

Answered: 1 week ago

Question

★★★★★
If the nominal interest rate is 5% and the inflation rate is 3%, what is the real interest rate?

Answered: 1 week ago

Question

★★★★★
You are attempting to formulate an investment strategy. On the one hand, you think there is great upward potential in the stock market and would like to participate in the upward move if it...

Answered: 1 week ago

Question

★★★★★
Consider the following $1,000 par value zero-coupon bonds: According to the expectations hypothesis, what is the market's expectation of the yield curve one year from now? Specifically, what are the...

Answered: 1 week ago

Question

★★★★★
Demand for a specific type of cake at a local pastry shop can be approximated using a Poisson distribution with a mean of six per day. The manager estimates it costs $9 to prepare each cake. Fresh...

Answered: 1 week ago

Question

★★★★★
A fish store buys fresh tuna daily for $4.20 per kg and sells it for $5.70 per kg. At the end of each day, any remaining tuna is sold to a producer of cat food for $2.40 per kg. Daily demand for tuna...

Answered: 1 week ago

Question

★★★★★
Tire distribution of demand for jelly doughnuts on Saturdays at a doughnut shop is shown in the following table. Determine the optimal number of doughnuts, in dozens, to make each Saturday morning if...

Answered: 1 week ago

Previous Question Next Question