Question
In: Finance
1. Calculate the requested measures in parts (a) through (g) for bonds A and B (assume...
1. Calculate the requested measures in parts (a) through (g) for bonds A and B (assume that each bond pays interest semiannually):
Bond A . Bond B
Coupon 4% 4.5%
Yield to maturity 4% 5%
Maturity (years) 3 10
Par $100.00 $100.00
Price $100.00 ?
(a) What is the price of bond B?
(b) What is the price value of a basis point for bonds A and B?
(c) Compute the Macaulay duration for the two bonds.
(d) Compute the modified duration for the two bonds.
(e) Compute the approximate modified duration for bonds A and B using the shortcut formula by changing yields by 10 basis points and compare your answers with those calculated in part (d).
(d). Compute the convexity measure for the two bonds.
(g) Compute the approximate convexity measure for bonds A and B using the shortcut formula by changing yields by 10 basis points and compare your answers to the convexity measure calculated in part (f).
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Calculate the requested measures for bonds A and B (assume each bond pays interest Semi-Annually: Bond...
Calculate the requested measures for bonds A and B (assume each
bond pays interest Semi-Annually:
Bond A: Coupon: 8%, YTM: 8%, Maturity (in years): 2, Par:
100.00, Price:100.000
Bond B: Coupon: 9%, YTM: 8%, Maturity (in years): 5, Par:
100.00, Price:104.055
A.) Calculate the duration for the two bonds by changing the
yield up and down 25 basis points
B.) Calculate the duration for the two bonds by changing the
yield up and down 10 basis points.
C.) Compare Your...
Calculate the requested measures for bond X, which pays interest semiannually: Bond X Coupon 6% Yield...
Calculate the requested measures for bond X, which pays
interest semiannually:
Bond X
Coupon
6%
Yield to maturity
7%
Maturity (years)
4
Par
100.00
Price
96.563
What is the price value of a basis point?
Compute the Macaulay duration.
Compute the modified duration.
Question 1. (This question has two parts: a and b) Assume that the United States and...
Question 1.
(This question has two parts: a and b) Assume that the United
States and Cambodia both have similar demand functions and similar
taste preferences. The United States however is capital abundant
while Cambodia is labour abundant. Assume that the two countries
produce only two goods: capital-intensive cars and labour-intensive
shoes. Currently, the two countries are in the process of
negotiating a bilateral free trade agreement (FTA).
Part (a)
Use the concepts of supply and demand to illustrate the...
Assume that the differences are normally distributed. Complete parts (a) through (d) below. Observation 1 2...
Assume that the differences are normally distributed. Complete
parts (a) through (d) below. Observation 1 2 3 4 5 6 7 8 Upper X
Subscript i 40.9 50.0 44.6 42.9 47.2 48.7 51.4 50.2 Upper Y
Subscript i 45.6 48.3 46.4 47.8 50.1 50.2 53.2 50.6 (a) Determine
d Subscript i Baseline equals Upper X Subscript i Baseline minus
Upper Y Subscript i for each pair of data. Observation 1 2 3 4 5 6
7 8 di nothing nothing...
Assume that the differences are normally distributed. Complete parts (a) through (d) below. Observation 1 2...
Assume that the
differences are normally distributed. Complete parts
(a) through (d) below.
Observation
1
2
3
4
5
6
7
8
Xi
43.4
51.5
44.1
44.4
51.3
42.2
47.7
49.4
Yi
47.6
50.2
48.8
49.5
51.2
45.7
48.3
50.2
(a)
Determine di = Xi − Yi for each pair of data.
Observation
1
2
3
4
5
6 7
di
_________ __________ __________ __________ __________
__________ __________
(Type integers or
decimals.)
(b) Compute d and sd .
d=...
Assume that the differences are normally distributed. Complete parts (a) through (d) below. Observation 1 2...
Assume that the differences are normally distributed. Complete
parts (a) through (d) below.
Observation
1
2
3
4
5
6
7
8
Upper X Subscript iXi
52.852.8
44.044.0
45.745.7
41.441.4
47.047.0
47.647.6
50.650.6
46.746.7
Upper Y Subscript iYi
53.253.2
45.745.7
50.550.5
45.545.5
48.648.6
47.947.9
51.351.3
46.646.6
(a) Determine
d Subscript i Baseline equals Upper X Subscript i Baseline minus
Upper Y Subscript idi=Xi−Yi
for each pair of data.
Observation
1
2
3
4
5
6
7
8
di
negative ....
Assume that the differences are normally distributed. Complete parts (a) through (d) below. Observation 1 2...
Assume that the differences are normally distributed. Complete
parts (a) through (d) below.
Observation
1
2
3
4
5
6
7
8
Xi
44.9
50.8
45.6
48.1
53.5
50.6
49.9
48.0
Yi
46.2
51.3
48.9
52.8
53.7
52.8
50.3
50.6
(a) Determine di=Xi−Yi for each pair of data.
Observation
1
2
3
4
5
6
7
8
di
(Type integers or decimals.)
(b) Compute d and sd.
(c) Test if μd <0 at the a=0.05 level...
Assume that the differences are normally distributed. Complete parts (a) through (d) below. Observation 1 2...
Assume that the differences are normally distributed. Complete
parts (a) through (d) below.
Observation
1
2
3
4
5
6
7
8
Open in StatCrunch
+
Copy to Clipboard
+
Open in Excel
+
Upper X Subscript iXi
46.746.7
47.747.7
45.645.6
50.250.2
48.448.4
50.850.8
47.847.8
48.648.6
Upper Y Subscript iYi
50.150.1
48.448.4
47.347.3
54.554.5
47.947.9
50.950.9
49.649.6
50.350.3
(a) Determine
d Subscript i Baseline equals Upper X Subscript i Baseline minus
Upper Y Subscript idi=Xi−Yi
for each pair of data....
Assume that the differences are normally distributed. Complete parts (a) through (d) below. Observation 1 2...
Assume that the differences are normally distributed. Complete
parts (a) through (d) below. Observation 1 2 3 4 5 6 7 8 Upper X
Subscript i 42.7 51.2 44.4 48.6 50.2 44.9 51.9 43.6 Upper Y
Subscript i 46.6 49.6 48.6 52.7 50.6 47.4 52.4 45.7 (a) Determine
d Subscript i Baseline equals Upper X Subscript i Baseline minus
Upper Y Subscript i for each pair of data. compute d and sd test if
Ud<0 at the 0.05 level of...
1. Assume that you start with 0.495 g of copper turnings: a)Calculate the initial number of...
1. Assume that you start with 0.495 g of copper turnings:
a)Calculate the initial number of moles of Cu.
ANSWER CALCULATED ALREADY: 7.79×10-3
mol
b) Calculate the minimum volume of 16.0 M HNO3
required to dissolve all of the copper (step 1).
c)If, in practice, 5.0 mL of 16.0 M nitric acid were added to
effect the dissolution of the copper (step 1), what would be the
minimum volume of 4.00 M NaOH required to neutralize the
remaining acid and...
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