Question
Consider a bond with a coupon of 7.4 percent, six years to maturity, and a current price of $1,030.30. Suppose the yield on the bond
Consider a bond with a coupon of 7.4 percent, six years to maturity, and a current price of $1,030.30. Suppose the yield on the bond suddenly increases by 2 percent.
Use duration to estimate the new price of the bond.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Calculate the new bond price using the usual bond pricing formula.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Consider a bond with a coupon of 7.4 percent, six years to maturity, and a current price of $1,030.30. Suppose the yield on the bond suddenly increases by 2 percent. a. Use duration to estimate the new price of the bond. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Price b. Calculate the new bond price using the usual bond pricing formula. Note: Do not round intermediate calculations. Round your answer to 2 decimal places
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Cash Confident An Entrepreneurs Guide To Creating A Profitable Business
Authors: Melissa Houston
1st Edition
1637586361, 978-1637586365
