A bond with a coupon rate of 9 percent sells at a yield to maturity of 11 percent. If the bond matures in 15 years, what is the Macaulay duration of the bond? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Answer is complete but not entirely correct. Macaulay Modified Duration 8.290 7.470 years years

A bond with a coupon rate of 9 percent sells at a yield to maturity of 11 percent. If the bond matures in 15 years, what is the Macaulay duration of the bond? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Answer is complete but not entirely correct. Macaulay Modified Duration 8.290 7.470 years years

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 6FPE

See similar textbooks

Similar questions

A coupon-paying bond matures exactly 10 years and 4 months from now. Find the bond’s coupon rate if a 6-month Forward bond price is equal to $121, the current bond price is $119, and all zero rates for time periods of under 1 year are equal to 7%. Solve using excel
A bond has a par value of $1,000, a time to maturity of 15 years, and a coupon rate of 7.80% with interest paid annually. If the current market price is $780, what will be the approximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
A bond with a face value of $1,000 has 10 years until maturity, has a coupon rate of 5.2%, and sells for $1,105. a. What is the current yield on the bond? (Enter your answer as a percent rounded to 2 decimal places.) b. What is the yield to maturity if interest is paid once a year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.) c. What is the yield to maturity if interest is paid semiannually? (Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places.)
You find a bond with 19 years until maturity that has a coupon rate of 8 percent and a yield to maturity of 7 percent. What is the Macaulay duration? The modified duration? Answers are Macaulay duration = 10.775 Years (Approx) Modified duration = 10.070 Years
What is the duration of the following bond:$1,000par value,6%annual coupon, 4 years to maturity, and yield to maturity of6.5%? You will need your answer for the next question. In the prior question, what is the present value of the bond?
What is the Macaulay duration of a 7 percent semiannual coupon bond with two years to maturity and a current price of $1,055.30? (Note: You are required to solve the problem by calculating "Years \times PV / Bond Price" for each cash flow and summing the results. YTM and PV must be calculated using a financial calculator. Round your answer to four decimal places.)
A bond with a redemption value of £100 pays coupons of £1.50 semi-annually (i.e. the bond holder receives £1.50 twice per year), with the first coupon due in half a year. The bond will mature in ten years’ time. It is currently selling for £95.25. 1 (a) Without making any calculations can you determine which is greater: the redemption yield or the interest yield? Why? (b) Compute the redemption yield (annual effective), using a method of your choice, and explaining your calculation.
You have a bond with a modified duration of 14 years currently. The convexity of the bond is 169. In the event that the bond's yield changes from 8.6% to 10%, what will be the approximate percentage change in the bond's price? Enter your answer as a decimal number or with the percentage sign.
A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095. What is its yield to maturity (YTM)? Round your answer to two decimal places. % Assume that the yield to maturity remains constant for the next 5 years. What will the price be 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
A coupon-paying bond matures exactly 10 years and 4 months from now. Find the bond’s coupon rate if a 6-month Forward bond price is equal to $121, the current bond price is $119, and all zero rates for time periods of under 1 year are equal to 7%.
how does the equation for valuing a bond change if semiannual payments are made? find the value of a 10-year, semiannual payment, 10% coupon bond if nominal rd equal 13%.
A bond that matures in 1212 years has a $1 comma 0001,000 par value. The annual coupon interest rate is 1414 percent and the market's required yield to maturity on a comparable-risk bond is 1515 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually?