Question
Band A: Term to maturity: 10 years from today Face value: $1,000 Annual Coupon rate: 6% Number of payments per year: 1 Bond B Term
Band A: Term to maturity: 10 years from today Face value: $1,000 Annual Coupon rate: 6% Number of payments per year: 1
Bond B Term to maturity: 20 years from today Face value: $1,000 Annual Coupon rate: 10%
Compute the price for each bond. The current market interest rate for the bonds is 8%. Assume that YTM of each bond equals the current market interest rate. Then make a table comparing the bond prices when the YTM varies from 1%, 2% . . . 17%. Compute duration and modified duration for each bond. Use (modified) duration to estimate the percentage change of price for each bond if the YTM increases from 8% to 12%. Page 2
Number of payments per year: 1
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The Crowdfunding Handbook Raise Money For Your Small Business Or Start Up With Equity Funding Portals
Authors: Cliff Ennico
1st Edition
081443360X, 978-0814433607
