Question
Question 1 Camel Bank holds $16 million in government bonds having a duration of 15 years. If interest rates suddenly rise from 6.5 percent to
Question 1
Camel Bank holds $16 million in government bonds having a duration of 15 years. If interest rates suddenly rise from 6.5 percent to 7.25 percent, what percentage change should occur in the bonds market price? [Alert: watch its sign + or -]
Please show your work. Write your answers with two decimal points
Question 2
A bond has a face value of $1000 and coupon payments of $95 annually. Market interest rates are 4%. This bond matures in three years and is selling in the market for (1) $__________. (2) What is this bond's duration? ___________
Please show your work. Write your answers with two decimal points
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