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You are concerned about potential volatility in market interest rates in the coming years that could...

You are concerned about potential volatility in market interest rates in the coming years that could drive YTM up or down suddenly. Since you are managing a bond portfolio, you want to be able to say how much your bond values will change in the face of a changing YTM. In particular, you are looking at a $1,000 face value bond by Pik-U-Up, Inc. The bond has 6 years until maturity, has a coupon of 4.1% paid semiannually, and an initial 6.9% YTM.

What is the modified duration of the bond?

A. 4.35 years

B. 5.14 years

C. 5.32 years

D. 5.88 years

E. 6.08 years

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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