Question
Hi! Please assist me with a problem for my practice exam. My professor hasn't been much help and i'm honestly lost with this problem right
Hi! Please assist me with a problem for my practice exam. My professor hasn't been much help and i'm honestly lost with this problem right now. Thanks for any help!!!
Find the Macaulay duration and the modified duration of a 15-year, 9.0% corporate bond priced to yield 7.0%. According to the modified duration of this bond, how much of a price change would this bond incur if market yields rose to 8.0%? Using annual compounding, calculate the price of this bond in one year if rates do rise to 8,0%
a. The Macaulay duration is ___ years.
b. The modified duration is ___ years
c. If market yields rose to 8.0%, the change would be ___.
d. Using annual compounding, the price of this bond in 1 year if rates do rise to 8.5% is ___.
e. The actual percentage change in bond price is ___.
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