FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that you have purchased a 4-year bond with a coupon rate of 0.07 and a yield to maturity of 0.078. The par value of

Assume that you have purchased a 4-year bond with a coupon rate of 0.07 and a yield to maturity of 0.078. The par value of the bond is $1000. The current price of the bond is $973.3846 and the duration is 3.618695. If the yield of the bond changes by 55 basis point, calculate the change in price using the duration approximation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Personal Finance

Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes

8th Edition

007322359X, 9780073223599

More Books

Students also viewed these Finance questions

Question

★★★★★
A 100-m-long conductor of uniform cross section has a voltage drop of 4 V between its ends. If the density of the current flowing through it is 1.4 x 106 (A/m2), identify the material of the...

Answered: 1 week ago

Question

★★★★★
The annual cash flows (in $1000 units) for Browning Brothers Glass Works are summarized. (a) Determine the total net cash flow over the 5 years. (b) Calculate the percentage of revenues represented...

Answered: 1 week ago

Question

★★★★★
5. How does your blood pressure compare with that of others of your same gender? Check your systolic blood pressure against the appropriate histogram in part 3 or 4 to deter- mine whether your blood...

Answered: 1 week ago

Question

★★★★★
My Way Software Inc. is a designer, manufacturer, and distributor of software for microcomputers. A new product, Movie Design 2010, was released for production and distribution in early 2010. In...

Answered: 1 week ago

Question

★★★★★
A condensed income statement by product line for Crown Beverage Inc. indicated the following for Royal Cola for the past year: Sales Cost of goods sold Gross profit Operating expenses Loss from...

Answered: 1 week ago

Question

★★★★★
You are considering an option to purchase or rent a single residential property. You can rent it for $2,000 per month and the owner would be responsible for maintenance, property insurance, and...

Answered: 1 week ago

Question

★★★★★
Finally, 21st Century is also considering Project Z Project Z has an up-front after-tax cost of $500,000, and it is expected to produce after-tax cash flows of $100,000 at the end of each of the next...

Answered: 1 week ago

Question

★★★★★
2. A liquid is heated in a lab using a hot plate. The graph of temperature vs. time is as follows. Temperature of Solution Temperature (C) 888R 8 8 8 8 8 9 110 200 10 20 40 50 60 70 90 Time (min)...

Answered: 1 week ago

Question

★★★★★
3. Develop a database program that creates a database named cities.db. The cities.db database must have a table named Cities, with the following columns: Column Name Data Type I Attributes City Name...

Answered: 1 week ago

Question

★★★★★
Prior to the Holiday season, Toys-R-Us would increase their on-hand inventory levels. What is the rational for this (see chapter 9)? What are some of the reasons why Toys-R-Us would not purchase more...

Answered: 1 week ago

Question

★★★★★
Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 275 units from the January 30 purchase, 5 units...

Answered: 1 week ago

Question

★★★★★
3. Do you think Benoit Vincent would have benefited from involvement in a 360- degree multi-rater assessment program? Explain your answer.

Answered: 1 week ago

Question

★★★★★
a. Did you express your anger verbally? Physically?

Answered: 1 week ago

Question

★★★★★
1. Who Moved My Cheese? is the all-time best-selling book in Amazon.coms history and is printed in 42 languages. Analyze why organizations around the world would buy millions of these books for their...

Answered: 1 week ago

Previous Question Next Question