Question
A money manager is holding a 10-year annual coupon bond with a coupon rate of 12% and current price of $8,000,000. The duration for this
A money manager is holding a 10-year annual coupon bond with a coupon rate of 12% and current price of $8,000,000. The duration for this bond is 8.4 years when the interest rate is 9%. The interest rate is expected to increase from 9% to 10%.
a. What is the modified duration of the bond?
b. What will be the approximate dollar change in the bond price?
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Financial Literacy And Money Script A Caribbean Perspective
Authors: Christine Sahadeo
1st Edition
3319770748, 978-3319770741
