Question
A straight bond has a modified duration of 7, value of 102, and yield-to-maturity is 4%. The bond pays coupons semi-annually and its yield-to-maturity is
A straight bond has a modified duration of 7, value of 102, and yield-to-maturity is 4%. The bond pays coupons semi-annually and its yield-to-maturity is quoted as a semi-annual APR. If interest rates increase by 25 basis points, compute the modified duration-based estimate of the new price of the bond.
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Horngrens Accounting
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura
12th edition
978-0134674681
