Question
A bond with 3 years to maturity and a coupon of 6.25% is currently selling at $932.24. Assume annual coupon payments. a.What is its yield
A bond with 3 years to maturity and a coupon of 6.25% is currently selling at $932.24. Assume annual coupon payments.
a.What is its yield to maturity?
b.Compute its duration using Equation 5.7 and the YTM calculated above at the discount rate.
c.If interest rates are expected to decrease by 50 basis points, what is the expected dollar change in price? Percentage change in price?
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Economics Today The Macro View
Authors: Roger LeRoy Miller
19th Edition
0134478762, 978-0134478760
