Consider the following: Fixed-rate Bond Fixed-rate Note Price 107.18 Yield to maturity 5.00% Periods to maturity 18 Modified duration 6.9848 a. For an increase in interest rates of 100 basis points, determine the change in value for the fixed-rate not Show your work. 100.00 5.00% 8 3.5851 b. For an increase in interest rates of 100 basis points, determine the change in value for the fixed-rate bon Show your work. c. Which of the two fixed-rate securities are more sensitive to increases interest rates? Why?
Consider the following: Fixed-rate Bond Fixed-rate Note Price 107.18 Yield to maturity 5.00% Periods to maturity 18 Modified duration 6.9848 a. For an increase in interest rates of 100 basis points, determine the change in value for the fixed-rate not Show your work. 100.00 5.00% 8 3.5851 b. For an increase in interest rates of 100 basis points, determine the change in value for the fixed-rate bon Show your work. c. Which of the two fixed-rate securities are more sensitive to increases interest rates? Why?
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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