A bond has a price of $940 at a YTM of 7%, a duration of 7.50...

A bond has a price of $940 at a YTM of 7%, a duration of 7.50 and a convexity of 60.50. Estimate the bond’s price if YTM were to fall to 5% using duration PLUS convexity. SHOW WORK

Expert Solution

NO INTERMEDIATE ROUNDING IS DONE

jeff jeffy answered 4 months ago

An 8% 15 year bond has a ytm of 7%. If the ytm falls by 1%,...

An 8% 15 year bond has a ytm of 7%. If the ytm falls by 1%, what will the new price be? What will it be approximately? Is duration adequate to describe this bond?

A 12-year semiannual bond with a coupon rate of 6% has a face value of $1,000 and a YTM of 7%. The price of the bond is

Question 1 A 12-year semiannual bond with a coupon rate of 6% has a face value of $1,000 and a YTM of 7%. The price of the bond isQuestion 1 options:912.85914.25916.36919.71920.57Question 2 A 4-year discount bond with a face value of $1,000 sells at $915. The YTM of the bond isQuestion 2 options:2.24%2.52%2.83%3.21%3.48%Question 3 A 7-year semiannual bond with a face value of $1,000 and a coupon rate of 8% sells at $974. The YTM of the bond isQuestion 3 options:4.3%5.5%6.5%7.2%8.5%Question 4 Consider a...

What is the price of a Verismo Company’s bond that has a 7.50 percent coupon and...

What is the price of a Verismo Company’s bond that has a 7.50 percent coupon and a face value of $1,000, pays interest semiannually, and has 15 years to maturity, if the required rate of return is 5 percent? (Points : 3.5) $1051.87. $1,134.21. $1,261.63. $997.25. $950.08.

A 12-year, 8 percent bond with a YTM of 12 percent has a Macaulay duration of...

A 12-year, 8 percent bond with a YTM of 12 percent has a Macaulay duration of 9.5 years. If interest rates decline by 50 basis points, what will be the percent change in price for this bond?

An investor owns a bond with a modified duration of 0,5. At the moment YTM for...

An investor owns a bond with a modified duration of 0,5. At the moment YTM for that bond is equal to 3,28%. What will be the magnitude of bond price change if YTM for the bond changes to 3,58%. Explain how can you improve accuracy of estimation of a bond price change resulting from the change of market interest rates

Given a 9-year bond with YTM of 4% and a duration of 7.5, what is the...

Given a 9-year bond with YTM of 4% and a duration of 7.5, what is the expected percent price change/return for a 0.05% (5 basis-point/bps) shift up in market yields? Given 1-year ZCB securities with 5.2% yield in GBP and 4.5% yield in EUR, and a spot exchange rate of GBP/EUR at 1.5408, what expected spot ex- change rate in 1-year would result in a break-even between the two instruments? Which bond would be a better investment given a 1Y...

A 5 year bond has a YTM of 7% and a coupon rate of 8%. Assuming...

A 5 year bond has a YTM of 7% and a coupon rate of 8%. Assuming a par value of $1,000 and semi-annual coupon payments, what should this bond be trading for?

what are the price and duration of 5 year , 7% coupon, semi-annual bond if market...

what are the price and duration of 5 year , 7% coupon, semi-annual bond if market interest rate is 4%

You hold a bond with nine years until maturity, a YTM of 4%, and a duration...

You hold a bond with nine years until maturity, a YTM of 4%, and a duration of 7.5. The cash (one-year) rate is 2.5%. a) In the next few minutes, you expect the market yield to go up by 5 basis points (i.e., 0.05%). What is the bond’s expected percentage price change, and your expected return, over the next few minutes? b) Over the next year, you expect the market yield to go down by 30 basis points (i.e., 0.30%)....

Calculate the bond price, duration, actual changes in bond price, and changes in bond price based...

Calculate the bond price, duration, actual changes in bond price, and changes in bond price based on duration. Coupons are paid at the end of each year. (Mostly need help with the bottom section) Maturity, in years 20 YTM 5% Coupon rate 6% Face value 1,000 Bond price Year Ct t*Ct/(Price*(1+YTM)^t) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Duration Change in YTM Actual change in bond price...

Question