Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

you invested in a govenrment bond which pays 18% coupon interest annualy. the bond has 3 years to maturity and the interest rate in the

you invested in a govenrment bond which pays 18% coupon interest annualy. the bond has 3 years to maturity and the interest rate in the economy is 20%. the par value of the bond is 1.000tl. a) what is the price of the bond? b) what is the duration of the bond? c) f market interest rate is dropped by 1%, what is the approximate % change in the price of the bond? calculate your solutions using the duration approach.

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

Fundamentals Of Financial Institutions Management

Authors: Marcia Cornett, Anthony Saunders

1st Edition

0256253676, 9780256253672

More Books

Students also viewed these Finance questions