Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Prepare a duration table for a zero-coupon bond using the following assumptions: a. $100,000 par value b. 10-year maturity c. Discount Rate of 12%arrow_forward1. How to calculate the value of a 6 year 2% coupon bond with semiannual payments, 1000 par. Expected return is the risk free rate of 3%. 2. Price a 5 year 4% semiannual coupon bond if the yield to maturity is 6% (write the price as if par is 100, use 5 decimal places)arrow_forwardConsider a four year annual bond paying a 7% coupon, with a yield to maturity of 6.0%. What is the duration of the bond? Multiple Choice O O O 3.631 3.785 3.814 3.965arrow_forward
- A) Price a 5-year 4% semiannual coupon bond if the yield to maturity is 6% (write the price as if par is 100, use 5 decimal places) B) If the yield to maturity for a one year zero coupon bond is 5.2% and the yield to maturity for a 2-year zero coupon bond is 5.8%, what is the implied future short rate from year 1 to 2 (use 5 decimal places, write 3.333% as .03333)?arrow_forwardYou purchased a coupon-bearing bond at $800 and resold it at $900 after exactly one year. If the coupon is $60 paid annually, what is the current yield of the bond? O A. 0.075 O B. 0.125 O C. 0.067 O D. 0.200arrow_forwardSuppose a five-year, $1,000 bond with annual coupons has a price of $896.24 and a yield to maturity of 6.4%.What is the bond's coupon rate? (round to 3 decimal places)arrow_forward
- What are the Modified Duration and Macaulay Duration of the following bond? Coupon Rate = 8% (Semi-annually paid) YTM = 9% Maturity = 2 Years Par Value = 1,000 (Hint: this question is similar to Example 1 and Example 2 on slides) ModD = 1.886 and MacD = 1.805 ModD = 1.784 and MacD = 1.954 ModD = 1.954 and MacD = 1.784 ModD = 1.805 and MacD = 1.886arrow_forwardQuestion A .Consider a 2-year, risk-free bond with a coupon rate of 6% (annual coupons) and a face value of $1,000. If the yield on the above bond is 6%: a. What is the Macaulay duration of this bond? b. If the yield increases to 7% immediately, what does the duration approximation predict will be the percentage change in the bond price? c. If the yield decreases to 5% instead, what is the approximate percentage change in the bond price implied by the bond’s duration? d. After receiving the first coupon payment in year 1, the yield increases to 7% and you decide to sell the bond. What is your annualized HPR? Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this linearrow_forwardThe current spot GBP/USD rate is 1.9455 and the three-month forward rate is 1.9173. Based on your analysis of the exchange rate, you are pretty confident that the spot exchange rate will be 1.9252 in three months. Assume that you would like to trade £5,000,000 in the forward market. What would be your speculative profit in dollar terms if the spot exchange rate actually turns out to be 1.9000. (USD, no cents)arrow_forward
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