Question
Bond ABC has maturity of 1.5 years, coupon rate of 6% (interest paid semi-annually ), and YTM of 10%. a.Calculate the actual Macaulay duration of
Bond ABC has maturity of 1.5 years, coupon rate of 6% (interest paid semi-annually), and YTM of 10%. a.Calculate the actual Macaulay duration of this bond in years. (Round to 4 decimal places)
b. Calculate the actual Modified duration of this bond in years. (Round to 4 decimal places)
c.Use the bonds duration to estimate its dollar price change if interest rates increase by 80 bsp. (Enter a percentage number, round to 4 decimal places, beware of the signs (+/-))
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Financial Management Theory And Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
10th Edition
0030329922, 9780030329920
