Question
A FI has invested in Eurobond that, has the following features: Face value= $10,000, Coupon rate= 6 percent (semi-annual payment), Duration = 5 years. The
A FI has invested in Eurobond that, has the following features: Face value= $10,000, Coupon rate= 6 percent (semi-annual payment), Duration = 5 years. The bond is selling at par. What is the modified and dollar duration? Select one:
a. 6.85; 68,559.45
b. 4.85; 48,543.69
c. 4.95; 49,554.56
d. 5.68; 56,877.36
e. 5.86; 58,695.36
what is correct answer of this question ignore those selection
Step by Step Solution
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Modified Duration Calculation Given 10000 face value Annual coupon rate 6 or 006 Annual YTM 6 or 006 because the Bond is Selling at Par Number of years 5 2 times per year for coupon payments Fundament...
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Financial Institutions Management A Risk Management Approach
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
8th edition
978-0078034800, 78034809, 978-0071051590
