Question
There are four securities as summarized in the below table. Bond Coupon Rate (%) Maturity (in years) Par Value (in dollars) Market Values (in dollars)
There are four securities as summarized in the below table.
| Bond | Coupon Rate (%) | Maturity (in years) | Par Value (in dollars) | Market Values (in dollars) | Yield to Maturity (%) |
| A | 5.5% | 5 | $ 10,000 | $ 9,786.74 | 6.00% |
| B | 4.25% | 4 | $ 20,000 | $ 19.113.21 | 5.50% |
| C | 3.75% | 3 | $ 30,000 | $ 29,170.32 | 4.75% |
| D | 5.625% | 8 | $ 40,000 | $ 38.323.53 | 6.30% |
(1) Calculate the respective dollar durations for four securities.
(2) Calculate the market-value-weighted yield.
(3) Calculate the duration-dollar-weighted yield.
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Valuation Measuring And Managing The Value Of Companies
Authors: McKinsey & Company Inc., Tom Copeland, Tim Koller, Jack Murrin
3rd Edition
0471361909, 978-0471361909
