Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bond A is a 25-year/6% bond selling at 70.3570. Bond A has a dollar duration of 747.2009. Bond B is a 20-year/5% bond selling at

Bond A is a 25-year/6% bond selling at 70.3570. Bond A has a dollar duration of 747.2009. Bond B is a 20-year/5% bond selling at 70.3570. Bond B has a modified duration of 10.62. When the market interest rate increases form 9% to 9.1%? Which of the following is correct? Question 8Answer a. the approximate percentage price change of Bond A is -0.106% b. the approximate percentage price change of Bond B is -10.62% c. the approximate dollar price change of Bond A is $ -0.0747 d. the approximate percentage price change of Bond B is -1.062%

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_2

Step: 3

blur-text-image_3

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

Principles Of Finance

Authors: Scott Besley, Eugene F. Brigham

3rd Edition

0324232624, 9780324232622

More Books

Students also viewed these Finance questions

Question

4 What is the recruitment phase?

Answered: 1 week ago