Question
You have the following bond maturing in 7 years: Face Value = 1.000$; Annual coupons = 80$; Annual Interest rate= 6% Compute the PV of
You have the following bond maturing in 7 years:
Face Value = 1.000$;
Annual coupons = 80$;
Annual Interest rate= 6%
Compute the PV of the bond?
What will happen to the bond price if the interest rate increases to 8%?
Compute both the duration and the modified duration of the bond? Interpret your results
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Public Finance
Authors: Harvey S Rosen
6th Edition
0072374055, 978-0072374056
