Question
At an annual effective rate of interest of 4%, the price of a bond is $992. When the interest rate increases to 4.37%, the price
At an annual effective rate of interest of 4%, the price of a bond is $992. When the interest rate increases to 4.37%, the price of this bond is $973 using the first-order Macaulay approximation.
The modified duration of this bond is equal to:
Options:
A. 4.65
B. 4.89
C. 5.04
D. 5.24
E. 5.45
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
3rd Edition
0073382426, 9780073382425
