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 6 months ago

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 14% and interest is paid semiannually. You may use Appendix C to answer the questions. A. Calculate this bond's modified duration. Do not round intermediate calculations. Round your answer to two decimal places. B. Assuming the bond's YTM goes from 14% to 13.0%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three...

Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if...

Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if the bond's YTM is 14% and interest is paid semiannually. You may use Appendix C(https://cnow.apps.ng.cengage.com/ilrn/books/reia11h/appendix_c.jpg) 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 14% to 13.0%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal...

Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if...

Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if the bond's YTM is 10% 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 10% to 8.5%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal...

a. Calculate the duration of a 6 percent, $1,000 par bond maturing in three years if...

a. Calculate the duration of a 6 percent, $1,000 par bond maturing in three years if the yield to maturity is 10 percent and interest is paid semiannually. b. Calculate the modified duration for a 10-year, 12 percent bond with a yield to maturity of 10 percent and a Macaulay duration of 7.2 years.

Calculate the value of a bond that matures in 15 years and has a $1,000 par...

Calculate the value of a bond that matures in 15 years and has a $1,000 par value. The annual coupon interest rate is 14 percent and the market's required yield to maturity on a comparable-risk bond is 11 percent.

Calculate the value of a bond that matures in 16 years and has a $1,000 par...

Calculate the value of a bond that matures in 16 years and has a $1,000 par value. The annual coupon interest rate is 12 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent.

Calculate the value of a bond that matures in 18 years and has a $1,000 par...

Calculate the value of a bond that matures in 18 years and has a $1,000 par value. The annual coupon interest rate is 13 percent and the market's required yield to maturity on a comparable-risk bond is 15 percent.

Calculate the value of a bond that matures in 13 years and has a $1,000 par...

Calculate the value of a bond that matures in 13 years and has a $1,000 par value. The annual coupon interest rate is 9 percent and the market's required yield to maturity on a comparable-risk bond is 11 percent. The value of the bond is

A $1,000 par value bond has a 9% annual coupon and matures in 5.50 years. If...

A $1,000 par value bond has a 9% annual coupon and matures in 5.50 years. If the current market interest rate on bonds of this type is 7% p.a., calculate this bond’s invoice price, accrued interest, and clean price.

Pete plans to buy an 8 percent, $1,000 par bond that matures in three years and...

Pete plans to buy an 8 percent, $1,000 par bond that matures in three years and the interest is paid semiannually, and the bond’s YTM is 10 percent. Calculate the bond’s duration. (b) Calculate the bond’s modified duration. (c) Assuming the bond’s YTM declines from 10 percent to 9.5 percent, calculate the bond’s price change. Explain your answer. (d) Explain how changes in YTM affects the bond’s market price risk and reinvestment risk.

Question

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

Solutions

Expert Solution

Related Solutions

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

Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if...

Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if...

a. Calculate the duration of a 6 percent, $1,000 par bond maturing in three years if...

Calculate the value of a bond that matures in 15 years and has a $1,000 par...

Calculate the value of a bond that matures in 16 years and has a $1,000 par...

Calculate the value of a bond that matures in 18 years and has a $1,000 par...

Calculate the value of a bond that matures in 13 years and has a $1,000 par...

A $1,000 par value bond has a 9% annual coupon and matures in 5.50 years. If...

Pete plans to buy an 8 percent, $1,000 par bond that matures in three years and...