Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A bond has an effective duration of 4.523 and is traded at 98.5 per 100 par. The bond price is 99.5 if the interest rate

A bond has an effective duration of 4.523 and is traded at 98.5 per 100 par. The bond price is 99.5 if the interest rate decreases by 20 basis points.

What is the bond price if the interest rate increases by 20 basis point?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Step: 3

blur-text-image

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

Stock Market Trading For Beginners

Authors: Irvin Tarr

1st Edition

1491885327, 978-1491885321

More Books

Students also viewed these Finance questions