Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How large will the absolute price change of a par coupon bond be if the duration (based on continuous compounding) is 3.75 and a yield

How large will the absolute price change of a par coupon bond be if the duration (based on continuous compounding) is 3.75 and a yield shock of + 10 bp is projected? Express the price change in cents.

Is it 0,375 cents?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental And Natural Resource Economics

Authors: Thomas H Tietenberg, Lynne Lewis

10th Edition

1315523965, 9781315523965

More Books

Students also viewed these Economics questions