Question
Exercice: You have the following bond maturing in 7 years: Face Value = 1.000$; Annual coupons = 80$; Annual Interest rate= 6% 1. Compute the
Exercice:
You have the following bond maturing in 7 years:
Face Value = 1.000$;
Annual coupons = 80$;
Annual Interest rate= 6%
1. Compute the PV of the bond?
2. What will happen to the price of the bonds if ibterest rate increase to 8% and not 6%
3. Compute both the duration and the modified duration of the bond?
4. Interpret your results in question 3?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fiduciary Finance Investment Funds And The Crisis In Financial Markets
Authors: Martin Gold
1st Edition
1848448953, 9781848448957
