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You have the following bond maturing in 7 years: Face Value = 1.000$; Annual coupons = 7 0$; Annual Interest rate= 6 % 1. Compute
You have the following bond maturing in 7 years:
Face Value = 1.000$;
Annual coupons = 70$;
Annual Interest rate= 6%
1. Compute the PV of the bond?
2. What will happen to the bond price if the interest rate increases to 6%?
3. Compute both the duration and the modified duration of the bond?
4. Interpret your results in question 3?
( please show the whole work)
You have the following bond maturing in 7 years:
Face Value = 1.000$;
Annual coupons = 70$;
Annual Interest rate= 6%
1. Compute the PV of the bond?
2. What will happen to the bond price if the interest rate increases to 6%?
3. Compute both the duration and the modified duration of the bond?
4. Interpret your results in question 3?
( please show the whole work)
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