Question
An 8% bond with 15 years to maturity and a 6.2% yield has a Macaulay duration of 9.48 years. Calculate the approximate price change for
An 8% bond with 15 years to maturity and a 6.2% yield has a Macaulay duration of 9.48 years. Calculate the approximate price change for this bond using only its duration, assuming its yield to maturity decreased by 50 basis points.[Hint: First calculate modified duration and then use the formula: Percentage change in price = Dmodxy.]
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Managerial Accounting Decision Making and Performance Management
Authors: Ray Proctor
4th edition
273764489, 978-0273764489
