Question
PLEASE SHOW ALL EXCEL FORMULAS USED 5. A bond has just been issued. The bond has an annual coupon rate of 8% and coupons are
PLEASE SHOW ALL EXCEL FORMULAS USED
5. A bond has just been issued. The bond has an annual coupon rate of 8% and coupons are paid annually. The bond has a face value of $1,000 and will mature in 10 years. The bonds yield to maturity is 12%.
a.Calculate the actual change in the bonds price as the yield to maturity changes from 12% to 10%.
b. Use the bonds duration to calculate the approximate bond price change as the yield to maturity changes from 12% to 10%.
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International Financial Management
Authors: Jeff Madura
3rd Edition
0314862722, 978-0314862723
