Question
ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%. Assuming the bond is issued at par and pay annual
ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%. Assuming the bond is issued at par and pay annual coupon, what is a Macaulay duration of this bond?
а) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%. Assuming the bond is issued at par and pay annual coupon; Using the Macaulay duration by what percentage will the price of the bond change if its yield to maturity decreases by 1%?
b) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%. Assuming the bond is issued at par and pay annual coupon, what is a modified duration of this bond?
c) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%. Assuming the bond is issued at par and pay coupon on semiannual basis, what is a modified duration of this bond?d) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%. Assuming the bond is issued at par and pay coupon on semiannual basis; Using the modified duration by what percentage will the price of the bond change if its yield to maturity decreases by 1%?
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what is a Mac aul ay duration of this bond ANS WER The Mac aul ay duration of a bond is the weighted average of the times until each cash flow from th...
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Government and Not for Profit Accounting Concepts and Practices
Authors: Michael H. Granof, Saleha B. Khumawala
6th edition
978-1-119-4958, 9781118473047, 1118155971, 1118473043, 978-1118155974
