Question
An FI purchases at par value a $100 000 Treasury Bond paying 10% interest with a 7.5 year duration. If interest rates rise by 4%,
An FI purchases at par value a $100 000 Treasury Bond paying 10% interest with a 7.5 year duration. If interest rates rise by 4%, calculate the bond's new value. Recall that Treasury Bonds pay interest semi-annually. Use the duration valuation equation
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Financial Modeling
Authors: Simon Benninga
4th Edition
0262027283, 9780262027281
