You learn that a Wal-Mart bond has a maturity of 20 years and a duration of...

You learn that a Wal-Mart bond has a maturity of 20 years and a duration of 14.9 years. Suppose that interest rates on this bond fall by 0.46%. Calculate the corresponding percentage change in the price of the bond using the approximation method based on bond duration. Give your answer in percent to one decimal place. If the price decreases, then include a minus sign; if the price increases, do not include any sign. Do not type the % symbol

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Expert Solution

Calculate the corresponding percentage change in the price of the bond using the approximation method based on bond duration.

=-14.9*(-0.46%)
=6.85400%

jeff jeffy answered 2 years ago

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