Given the following information about a bond, calculate the modified duration of the bond. i) The term-to-maturity is two years. ii) Coupons are payable annually at 5%. iii) The bond is trading at par. Possible Answers A 1.859 B с 1.928 D 1.881 E 1.952 Cannot be determined since the yield rate i is not provided.

Given the following information about a bond, calculate the modified duration of the bond. i) The term-to-maturity is two years. ii) Coupons are payable annually at 5%. iii) The bond is trading at par. Possible Answers A 1.859 B с 1.928 D 1.881 E 1.952 Cannot be determined since the yield rate i is not provided.

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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The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price of Bond YTM Maturity (Years) 1 978.43 2.20 % 2 924.97 % 3 840.12 % 4 $ 784.39 % b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Price of Bond Maturity (years) 1 $ 978.43 2 924.97 840.12 784.39 Maturity (Years) Price of Bond Forward Rate 2 % 3 % 4 % AWN 3 4 $ $ GA $ $ $ SA 924.97 840.12 784.39
What is the market price of a bond if the face value is $1,000 and the yield to maturity is 6.7% ? The bond has a 6.15% coupon rate and matures in 12 years. The bond pays interest semiannually. Please express answer as $X.XX or XX.XX and use rounding guideline included in "Course Information" module. Do not round until the final result.
The following is a list of prices for zero-coupon bonds of various maturities. a. Calculate the yield to maturity for a bond with a maturity of (i) one year; (ii) two years; (iii) three years; (iv) four years. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Maturity (Years) 1 2 3 4 Maturity (years) 1 2 3 4 Maturity (Years) 2 3 4 $ $ $ $ b. Calculate the forward rate for (i) the second year; (ii) the third year; (iii) the fourth year. Assume annual coupon payments. (Do not round intermediate calculations. Round your answers to 2 decimal places.) $ $ $ Price of Bond 983.40 918.47 867.62 774.16 Price of Bond $983.40 918.47 867.62 774.16 Price of Bond YTM 918.47 867.62 774.16 % % % % Forward Rate % % % #
A bond has the following trading data: Coupon rate = 7 1/4%; Current price = 107.78125% of par; Maturity = 2 years. Bonds such this pay interest semiannually. DURATION. Calculate the duration of this bond. Be sure to store your intermediate data as you calculate your final answer. Question options: 1) 1.934 years 2) 1.907 years 3) 1.852 years 4) None of the above
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