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A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has duration...
A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has duration of 11.54 years and convexity of 192.4. The bond currently sells at a yield to maturity of 8%.
- Please find the price of the bond if its yield to maturity falls to 7% or rise to 9%.
- What prices for the bond at these new yields would be predicted by the duration rule and the duration-with-convexity rule? What is the percent error for each rule? What do you conclude about the accuracy of the two rules?
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jeff jeffy answered 1 year agoRelated Solutions
A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has duration...
A 30-year maturity bond making annual coupon payments with a
coupon rate of 12% has duration of 11.54 years and convexity of
190.8. The bond currently sells at a yield to maturity of 8%.
Required:
(a)
Find the price of the bond if its yield to maturity falls to 7%
or rises to 9%. (Round your answers to 2 decimal places.
Omit the "$" sign in your response.)
Yield to maturity of 7%
$
Yield to maturity of 9%
$ ...
A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has duration...
A 30-year maturity bond making annual coupon payments with a
coupon rate of 12% has duration of 11.54 years and convexity of
192.4. The bond currently sells at a yield to maturity of 8%.
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Time Remaining 2 hours 42 minutes 16 seconds
02:42:16
A 30-year maturity bond making annual coupon payments with a...
A 30-year maturity bond making annual coupon payments with a coupon rate of 12% has duration...
A 30-year maturity bond making annual coupon payments with a
coupon rate of 12% has duration of 11.54 years and convexity of
192.4. The bond currently sells at a yield to maturity of 8%.
(25 points)
Find the price of the bond if its yield to maturity falls to
7.5% or rises to 8.5%.
What prices for the bond at these new yields would be predicted
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Price of the bond
$
b. What price would be predicted by the duration
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e-1. Find the price of the bond if its yield to
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