Calculate the Macaulay duration of a 9%, $1,000 par bond that matures in three years if...

Calculate the Macaulay duration of a 9%, $1,000 par bond that matures in three years if the bond's YTM is 12% and interest is paid semiannually. You may use Appendix C to answer the questions.

Calculate this bond's modified duration. Do not round intermediate calculations. Round your answer to two decimal places.

years
Assuming the bond's YTM goes from 12% to 11.0%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal places. Use a minus sign to enter negative value, if any.

%

Expert Solution

Duration of given bond is 2.74 years

a. Bond modified duration 2.45 yeras

b. It was expected there was a rise of $23.17 due to drop of YTM from 12% to 11%

jeff jeffy answered 5 months ago

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Calculate the Macaulay duration of a 9%, $1,000 par bond that matures in three years if...

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