Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 28, 2024

A bond with maturity of 20 years has a YTM of 9.5% is priced at $793. Its duration ( not modified duration) is 15.5 years.

A bond with maturity of 20 years has a YTM of 9.5% is priced at $793. Its duration (not modified duration) is 15.5 years. What will happen to the bond price if the bonds YTM falls to 8.5%?

Fall by approximately 17%

Fall by approximately 14%

Rise by approximately 14%

Rise by approximately 17%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

Step: 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

Financial Accounting Essentials You Always Wanted To Know Self Learning Management Series

Authors: Vibrant Publishers , Kalpesh Ashar

5th Edition

1636510973, 978-1636510972

More Books

Students also viewed these Finance questions

Question

★★★★★

Should only banks and regulated financial institutions be allowed to issue ATM cards? Why or why not?

Answered: 1 week ago

Question

★★★★★

will give a thumbs up! The stockholders' equity accounts of Novak Corp on January 1, 2022, were as follows. During 2022, the corporation had the following transactions and events pertaining to its...

Answered: 1 week ago

Question

★★★★★

2. The extent to which training is customized for the particular needs of an employee or is developed based on the needs of a team, unit, or division

Answered: 1 week ago

Question

★★★★★

Klein Chemicals, Inc., produces a special oil-based material that is currently in short supply. Four of Kleins customers have already placed orders that together exceed the combined capacity of...

Answered: 1 week ago

Question

★★★★★

(Futures)You enter to short 125,000 futures delivered in 6 months. The future price is F 6 ($/)=1.09. If at the maturity the spot rate is $1.14/, and you position is still alive, then your...

Answered: 1 week ago

Question

★★★★★

*E5-19 Presented below is information related to Emilie Co. 1. On April 5, purchased merchandise from De Ravin Company for $19,000, terms 2/10, net/30. FOB shipping point. 2. On April 6, paid freight...

Answered: 1 week ago

Question

★★★★★

1 12.5 points eBook C Print References TRANSACTIONS 1. Gave a cash refund of $875 to a customer because of a lost package. (The customer had previously paid in cash.) 2. Sent a check for $1,250 to...

Answered: 1 week ago

Question

★★★★★

Task 3: Scenarios For each of the five scenarios below, answer the following questions: a. What has the salesperson done wrong? Explain what the salesperson has done that could be cause for Rules of...

Answered: 1 week ago

Question

★★★★★

Homework-3 Suppose the relationship between X(t) and Y(t) of a stationary stochastic process is Y(t) = bx(t) + c. In the formula, b and c are both constants. Calculate the cross-covariance.

Answered: 1 week ago

Question

★★★★★

Question 5 1 pts Consider the following C code fragment: typedef union { char c; int i; double d; } my_union; my_union arr[2]; Suppose that arr[0] is stored at memory address 0. At what address is...

Answered: 1 week ago

Question

★★★★★

Networking for Windows 10 includes the configuration of IPv4, wireless networks, wired networks, switches, routers, and firewalls. Laptop users roam into a wide variety of locations where you don't...

Answered: 1 week ago

Question

★★★★★

What are the drawbacks of using one year of data to forecast a future year?

Answered: 1 week ago

Question

★★★★★

What is the R Square?

Answered: 1 week ago

Question

★★★★★

Click through each state and determine which state has the most variability in percentage of sales (do not consider U, which stands for undefined)?

Answered: 1 week ago

Previous Question Next Question