Question
You are interested in a bond that pays an annual coupon of 5 percent. The bond has a par value of $1,000 and 2 years
You are interested in a bond that pays an annual coupon of 5 percent. The bond has a par value of $1,000 and 2 years to maturity. Suppose that the bond has a yield to maturity of 3 percent. If the yield to maturity changes to 2.25 percent, how much should be the percentage price change of the bond based on its modified duration?
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Entrepreneurial Financial Management An Applied Approach
Authors: Jeffrey R Cornwall, David O Vang, Jean M Hartman
5th Edition
0367335417, 978-0367335410
