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A corporate bond returns 12% of its cost in the first year (ie the weight of the cash flow in the first year), 11% in
A corporate bond returns 12% of its cost in the first year (ie the weight of the cash flow in the first year), 11% in the second year, 10% in the third year and the remainder in the fourth year. What is the bond's duration in years? Suppose an investor purchases at par value a $1,000 bond that is paying 8% interest semiannually, with a 8 year maturity and a 7.5 year duration. If the required rate was 8% and it is projected to decrease by 50 basis points. What is the predicted new bond price after the interest rate changes
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