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A bond your company issued has par of $1000 and matures in 6 years. It pays annual coupons of $40 each. Annual interest rates are
A bond your company issued has par of $1000 and matures in 6 years. It pays annual coupons of $40 each. Annual interest rates are now 3%.
- What is the value of the bond?
- Premium bond or discount bond?
- What is the Macauleys Duration of the Bond?
- If you were to immunize this Bond, which you have booked as a liability, and you were going to use 1-year Zeroes and Perpetuities to match interest-rate change sensitivity risk, how much of each would you buy?
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Mission Ready Finances Proven Principles To Guide Your Story To Financial Freedom
Authors: Marco Parzych
1st Edition
173321531X, 978-1733215312
