An investor buys a 6% annual payment bond with three years to maturity. The Dond has a yield-to-maturity of 8% and is currently priced at 94.845806 per 100 of par. The bond's Macaulay duration is closest to: 2.62. 3 2.78.

An investor buys a 6% annual payment bond with three years to maturity. The Dond has a yield-to-maturity of 8% and is currently priced at 94.845806 per 100 of par. The bond's Macaulay duration is closest to: 2.62. 3 2.78.

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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Question

An investor buys a 6% annual payment bond with three years to maturity. The
bond has a yield-to-maturity of 8% and is currently priced at 94.845806 per 100
of par. The bond's Macaulay duration is closest to:
2.62.
2.78.
2.83.
B
C

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Please show working Please answer ALL OF QUESTIONS 1 AND 2 1. A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.5219%.a. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent.b. What is the bond's YTM? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Do not round intermediate calculations. Round your answers to two decimal places. 2. Nesmith Corporation's outstanding bonds have a $1,000 par value, a 7% semiannual coupon, 18 years to maturity, and a 9% YTM. What is the bond's price? Round your answer to the nearest cent.

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