Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 9.3 percent to 8.8 percent,

image text in transcribed

You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 9.3 percent to 8.8 percent, the fair present value rose from $965 to $975. The bond pays interest annually. What is the duration of this bond? Assume annual payments. (Do not round intermediate calculations. Round your answer to 1 decimal place. (e.g., 32.1)) Duration of this bond years

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Economics

Authors: Frank J. Fabozzi, Edwin H. Neave, Guofu Zhou

1st Edition

0470596201, 9780470596203

More Books

Students also viewed these Finance questions

Question

Explain how liability affects delegation.

Answered: 1 week ago