Question
You find a bond with 28 years until maturity that has a coupon rate of 6.5 percent and a yield to maturity of 6.1 percent.
You find a bond with 28 years until maturity that has a coupon rate of 6.5 percent and a yield to maturity of 6.1 percent. Suppose the yield to maturity on the bond decreases by 0.25 percent.
What is the estimated price of the bond using duration?
A. $1018.66
B. $1087.00
C. $1019.52
D. $1088.10
E. $1089.00
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
