A 6-year bond with an annual coupon of 4.5% currently trades with a yield of 3.2%. Estimate the: a. Bond price b. Bond prices in case yield increase, or decrease by 1.5% c. Modified duration (analytical and approximate) d. Convexity (analytical and approximate
A 6-year bond with an annual coupon of 4.5% currently trades with a yield of 3.2%. Estimate the: a. Bond price b. Bond prices in case yield increase, or decrease by 1.5% c. Modified duration (analytical and approximate) d. Convexity (analytical and approximate
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A 6-year bond with an annual coupon of 4.5% currently trades with a yield of 3.2%. Estimate the:
a. Bond price
b.
c. Modified duration (analytical and approximate)
d. Convexity (analytical and approximate
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