An 8%, 15-year bond has a yield-to- maturity of 10% and a modified duration of 8.05 years. If the market yield changes by 25 basis points, how much of the change in the bond's price will be due to duration?
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- Consider a 10-year bond with current price of $98.4 and a duration of 9.1 years. Suppose the yield on the bond is 9.6% per year with continuous compounding. What is the predicted change in the price (in dollars) of the bond if the yield increases by 0.4%? (required precision: 0.01 +/- 0.01)Assume that A six-year bond with a yield of 10% (continuously compounded) pays an 8% coupon at the end of each year. (a) What is the bond’s price? (b) What is the bond’s duration? What is the bond’s modified duration? (c) Use the duration to calculate the effect on the bond’s price of a 0.15% decrease in its yield.A bond's modified duration is 6.7 years, its convexity is 223.5, and its yield to maturity is 4.4% per year. By what percent will the bond's price change, if its yield to maturity decreases by 200 basis points? 1) 14.8% 2) 16.7% 3) 17.9% 4) 15.5% 5) 17.4%
- A bond currently sells for 1,200, which gives it a yield to maturity of 8%. Suppose that if the yield increases by 25 basis points, the price of the bond declines to 1,155. Based on this price change, what is the duration of the bond? How do i calculate this?Consider a bond with a duration of 8.8 years priced at $1,100. If market interest rates were to increase by 0.25%, what would be the predicted new bond price according to duration?A 30-year maturity bond making annual coupon payments with a coupon rate of 11.00% has a ation of 13.50 years. The bond currently sells at a yield to maturity of 5.75%. Ducation a. Find the exact dollar price of the bond if its yield to maturity falls to 4.75%. What is the % change in price? b. Assume that you need to make a quick approximation using the duration rule. What is the % change in price as approximated by the duration rule when the yield to maturity falls to 4.75%? c. Does the duration-rule provide a good approximation of the % price change in this case? Why or why not?
- What is the Macaulay duration of a semi-annual bond with a coupon rate of 7 percent, five years to maturity, and a current price of $959? What is the modified duration? Duration is __. years. Modified duration is __ years.Assuming annual coupon payment, a 3-year 8% coupon bond has a yield to maturity 9 percent. What is the duration? If market rate decrease by 0.75%, what’s the percentage change in bond price using the duration estimation approach?A 9-year bond has a yield of 13.5% and a duration of 8.63 years. If the MARKET yield changes by 60 basis points, what is the percentage change in the bond’s price? Is this an increase or decrease? A 9-year bond has a yield of 13.5% and a duration of 8.63 years. If the BOND'S yield changes by 60 basis points, what is the percentage change in the bond’s price? Is this an increase or decrease? ( Explain well both question with proper step by step Answer) .
- Consider a bond that has a current value of $1,081.11, a face value of $1,000.00, a coupon rate of 10% and five years remaining to maturity.a. What is the bond’s yield-to-maturity today?b. If the bond’s yield does not change, what is its value one year from today? Please solve both partsa bond has an annual modified duration of 6.25 years and an annual convexity of 45.25. If the bond's yield to maturity decreases by 50 basis points, the expected percentage price change is closest to: a)3.07% b)-3.07% c)-2.65%A four-year bond with a yield of 10% (continuously compounded) pays an 20% coupon at the end of each year. (? −0.1 ≅ 0.9,? −0.2 ≅ 0.8,? −0.3 ≅ 0.7,? −0.4 ≅ 0.6) a) What is the bond’s price? b) What is the bond’s duration? c) Use the duration to calculate the effect on the bond’s price of a 0.15% increase in its yield