Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A nine-year bond has a yield of 10% and a duration of 7.820 years. If the bonds yield increases by 50 basis points (i.e., 0.5%),

A nine-year bond has a yield of 10% and a duration of 7.820 years. If the bonds yield increases by 50 basis points (i.e., 0.5%), what is the percentage change in the bonds price? Enter your answer as a decimal (e.g., 0.01 instead of 1%), rounded to four decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_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

Public Finance In Theory And Practice

Authors: Richard Abel Musgrave, Peggy B. Muscrave

5th Edition

0070441278, 978-0070441279

More Books

Students also viewed these Finance questions

Question

If ln (x + y) = y2, find dy/dx.

Answered: 1 week ago