Question
A Treasury bond is currently trading at par, which means that the current clean price is 1,000. As we approach the next coupon date, its
A Treasury bond is currently trading at par, which means that the current clean price is 1,000. As we approach the next coupon date, its clean price will ____ and its full price will ____. Assume the yield stays constant during the period up to the next coupon date.
- A.Stay the same/ decrease
- B.Stay the same/ increase
- C.Increase/ stay the same
- D.Stay the same/ stay the same
- E.Increase/ increase
The Macaulay duration for a bond yielding 10% is 25.8 semiannual periods. How many percent should the price change if the yield rise by 20 basis points?
- A..02457%
- B.2.457%
- C.1.257%
- D..1257%
- E..2457%
What is the YTM for a zero coupon bond ($1,000 par) maturing 32.5 months from now selling for $800 today. Use semiannual rate approach.
- A.3.8%
- B.4.2%
- C.2.1%
- D.8.4%
- E.4.8%
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Personal Finance Building Your Future
Authors: Robert B. Walker, Kristy P. Walker
1st edition
9780077861728, 978-0073530659
