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Problem # 5 : A 1 0 - year bond has face value ( redemption value ) $ 1 0 0 , 0 0 0
Problem #: A year bond has face value redemption value $ and quarterly coupons of Consider the time right after the th coupon has been paid, when the yield is a What is the price of the bond? b Compute the price of the bond if the yield were to increase by basis point a basis point is of What is the absolute value of the difference between that price, and your answer to part a c Would the yield have to increase or decrease in order for the bond to increase in value by $ d Based only on your answer to b approximately how many basis points bp would the yield have to move in order for the bond to increase in value by $ Answer as a positive integer. Problem #: Problem #b: Answer correct to decimals. Answer correct to decimals. A Decrease B Increase Problem #c: Problem #d: Answer as a positive integer
Problem #: A year bond has face value redemption value $ and quarterly coupons of Consider the time right
after the th coupon has been paid, when the yield is
a What is the price of the bond?
b Compute the price of the bond if the yield were to increase by basis point a basis point is of
What is the absolute value of the difference between that price, and your answer to part a
c Would the yield have to increase or decrease in order for the bond to increase in value by $
d Based only on your answer to b approximately how many basis points bp would the yield have to move in
order for the bond to increase in value by $
Answer as a positive integer.
Problem #:
Problem #b:
Answer correct to decimals.
Answer correct to decimals.
A Decrease
B Increase
Problem #c:
Problem #d:
Answer as a positive integer
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