Question
Compute R2, R3, R4 (a: 5.749%, 6.33%, 6.868%) 4. R4 = 9%, R5 = 10%. Compute the one-year forward rate four years from now. (a:
Compute R2, R3, R4 (a: 5.749%, 6.33%, 6.868%) 4. R4 = 9%, R5 = 10%. Compute the one-year forward rate four years from now. (a: 14.09%)
Calculate the duration of the bond. Also calculate the modified duration and dollar duration. (4.53, 4.39, -5,103.19)
b. Explain graphically the concept of duration. Show how capital losses are offset by gains in reinvestment income and vice-versa.
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Finance Without Fear Business Forecasting Workbook
Authors: William S. Hettinger, John Dolan Heitlinger
1st Edition
0982891717, 9780982891711
