Question
Your company has recently invested in a pool of bonds. The basic feature of each is as follows: Face value= $1,000, Coupon rate= 10 percent
Your company has recently invested in a pool of bonds. The basic feature of each is as follows: Face value= $1,000, Coupon rate= 10 percent (annual payment), Duration = 7 years, Modified Duration = 6.36. The bond is selling at par.
What will be the new price of each bond using the duration model if interest rates increase to 0.25 percent?
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the bond is currently selling at par that means at 1000 ...
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Intermediate Accounting
Authors: James D. Stice, Earl K. Stice, Fred Skousen
17th Edition
032459237X, 978-0324592375
