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struggling on 11 - 16. 4-6 is given here is 4-6 from above (11 - 13) Using the information in numbers (4-6) above, estimate the

struggling on 11 - 16. 4-6 is given image text in transcribed
here is 4-6 from above
image text in transcribed
image text in transcribed
(11 - 13) Using the information in numbers (4-6) above, estimate the price change and new price for each bond using duration assuming interest rates increase by 2% Duration Estimated Price Change Estimated New Price Bond Coupon Required Return Time to Maturity 11 10% 15% 3 12 10% 15% 5 13 10% 15% 7 (14 - 16) Using the information in numbers (4-6) above, estimate the price change and now price for each bond using modified duration assuming interest rates increase by 2% MD Estimated Price Change Estimated New Price 15% Bond Coupon Required Return Time to Maturity 14 10% 3 15 10% 15% 5 16 10% 15% 7 11 Ef MATURITY 3 YEARS period cash flow discount factor cash flow cf*t 1 10 0.8696 8.70 8.695652 2 10 0.7561 7.56 15.12287 3 10 0.6575 6.58 19.72549 3 100 0.6575 65.75 197.2549 88,58 240.7989 cluration 2.718315 f MATURITY 5 YEARS period cash flow discount factor cash flow eft 1 10 0.8696 8.70 8.695652 10 0.7561 7.56 15.12287 3 10 0.6575 6.58 19.72549 10 0.5718 5.72 22.87013 10 0.4972 4.97 24.85884 100 0.4972 49.72 248.5884 83.24 339.86 1 luration 4.082947 of MATURITY 7 YEARS period cash flow discount factor cash flow cft 1 10 0.8696 8.70 8.695652 2 10 0.7561 7.56 15.12287 3 10 0.6575 6.58 19.72549 + 10 0.5718 5.72 22.87013 10 0.4972 4.97 24.85884 5 10 0.4323 4.32 25.93966 7 10 0.3759 3.76 26.31559 100 0.3759 37.59 263.1559 79.198 406.6842 s duration 5.135037 (4 - 6) Complete the following table and discuss your findings. Bond Coupon Required Return Time to Maturity Duration 4 10% 15% 3 5 10% 15% 5 6 10% 15% 7

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