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Anna Invested in a 15 year, 6% semiannual-pay, noncallable bond and she is concerned of a 80 basis point change in yield. The bond
Anna Invested in a 15 year, 6% semiannual-pay, noncallable bond and she is concerned of a 80 basis point change in yield. The bond is currently priced to yleld 8%. As a finance expert, you need to help her to: a. compute the current price of the bond. b. compute the effective duration of this bond (show workings)
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To compute the current price of the bond we can use the following formula PV C 1 1 r2n2 r2 FV 1 r2n2 ...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
