what is the bond's approximate modified duration

Q: Consider a bond with a principal of $1,000 that pays a coupon of $100 per year. If the bond matures…

A: Bond: It is a fixed income instrument that represents a loan made by an investor to a borrower. We…

Q: What is the duration of the following bond: $1,000 par value, 6% annual coupon, 4 years to maturity,…

A: Variables in the question:Par value=$1000Annual coupon=6% (assumed paid annually)N=4 yearsYTM=6.5%

Q: convexity

A: Introduction: Bonds are defined as units of debt which is issued by the company. It is a fixed…

Q: There is a goverment bond that pays %16 annual coupon interest however the payments are…

A: The price of the bond refers to the present value of all the future cash flows of that respective…

Q: A bond has a coupon rate of 8.1 percent and 5 years until maturity. If the yield to maturity is 11.3…

A: The price of the bond is calculated as present value of cash flows.

Q: If a bond's yield to maturity does not change, the return on the bond each year will be equal to the…

A: The yield to maturity calculates a bond's annualized return on investment by taking into account…

Q: Suppose a ten-year, $1,000 bond with an 8.2% coupon rate and semiannual coupons is trading for…

A: Yield to maturity can be calculated by following function in excel =RATE (nper, pmt, pv, [fv],…

Q: A par bond has a yield to maturity of 5.8% and pays coupons semi-annually.  What is the coupon…

A: The coupon rate are fixed payment that are done to bond holders . As these are investment for the…

Q: Suppose a 10 -year,$1,000bond with a(n)9%coupon rate and semiannual coupons is trading for a price…

A: Compound = Semiannually = 2Time = nper = 10 * 2 = 20Face Value = fv = $1000Coupon Rate = 9 / 2 =…

Q: suppose a 30 year, pay coupon of 4% is priced to yield 5%. par = 1000. the bond pays its coupon…

A: Par value = 1000 Coupon rate = 4% Coupon amount = 1000*0.04 = 40 Yield = 5% Years to maturity = 30…

Q: Suppose you can observe that 1-year bond interest rate is 4%, 2-year bond interest rate is 8%, and…

A: Bondholders earn a steady stream of income through periodic payments called interest. These…

Q: You find a bond with 28 years until maturity that has a coupon rate of 7 percent and a yield to…

A: A bond indicates a debt instrument that obligates its issuer to repay the par value along with a…

Q: The 1-year spot rate is 6%, the 2-year spot rate is 7%. The Treasury plans to issue 2-year maturity…

A: Bond is a debt security that is issued by organizations to raise debt funds from public and…

Q: A 15 year, semi-annual bond has a coupon rate of 4%. The YTM is 4%. What is the bond's duration and…

A: Given: Years = 15 Coupon rate = 4% YTM = 4%

Q: Suppose a ten-year, $1,000 bond with an 8.3% coupon rate and semiannual coupons is trading for…

A: A bond is a type of debt security where an investor loans money to an entity, typically a…

Q: A 10-year maturity bond making annual coupon payments with a coupon rate of 5% and currently selling…

A: Bonds: These are interest-paying securities that are issued by a corporation or the government to…

Q: Calculate the duration of a $1,000, 3% coupon bond with three years to maturity. Assume that all…

A: Par value = $ 1000 Coupon rate = 1000*0.03 = $ 30 Years to maturity = 3 Years Annual interest rate =…

Q: rate of return of the bond? W

A: Bond price refers to the amount which an investor is willing to pay at the time of existence of…

Q: If you borrow $10,000 over three years at 10% annual interest, what is the interestpayment in the…

A: Given Loan Amount =$10,000 Annual Interest Rate =10% Annual Payment =$4021.15

Q: You are holding a 5-year bond with a 6% annual coupon rate, an 8% yield to maturity and a $1,000 par…

A: Bonds are debt instruments issued by governments, municipalities, or corporations to raise capital.…

Q: A bond has an annual coupon rate of 4.1%, and has 4 years until maturity. If the bonding trading at…

A: Let face value of Bond be $1000   Annual coupon  = Face value of bond * Coupon rate = $1000 * 4.1% =…

Q: A 30-year maturity bond making annual coupon payments with a coupon rate of 14.5% has duration of…

A: Given: Par Value of the bond = $1000 Number of years to maturity “n” = 30 Annual coupon rate = 14.5%…

Q: Compute the Macaulay duration, modified duration and convexity of a coupon bond with face value F =…

A: Macaulay duration is used by investors to determine the effect of small change in yield on the bond…

Q: Compute the modified duration

A: Duration of the bond = 7.88 years Yield to maturity (YTM) = 4.5%.  Formula for calculation of…

Q: coupon

A: The general equation for bond price is P = C/(1+d)^n + F/(1+d)^n If semi annual payments are made,…

Q: Suppose a five-year bond with an 8% coupon rate and semi-annual compounding is trading for a price…

A: Variables in the question:FV=£ 1000 (assumed)N=5 yearnper=5 year *2=10Coupon rate=8%Semi-annual…

Q: A bond has an annual coupon rate of 4.4%, a face value of $1,000, a price of $1,147.26, and matures…

A: Coupon rate = 4.4% Face value = fv = $1000 Price of the Bond = pv = $1147.26 Time = nper = 10 years…

Q: The bond's duration is the sum of the present value of each payment weighted by the time period in…

A: Solution5. Calculate the Present Value Interest Factor (PVIF) at 7% for Year 5:

Q: A 30-year maturity bond making annual coupon payments with a coupon rate of 14.5% has duration of…

A: Matuirty = 30 yearsCoupon rate = 14.50%Duration = 10.64 yearsYTM = 9%To find: a. Price of bond if…

Q: You purchase a bond with an invoice price of $1,170. The bond has a coupon rate of 7.2 percent, and…

A: When the amount of accrued interest is deducted from the invoice price of the bond then the price of…

Q: uppose a 6-year zero-coupon bond offers a payment of $1,800 and the current market interest rate for…

A: A zero-coupon bond is a bond that does not pay interest but is traded at a deep discount.

Q: Consider a zero-coupon bond with a $1000 face value and 10 years left until maturity. Assuming that…

A: Bonds are debt instruments issued by companies. Companies usually pay periodic coupons or interest…

Q: Calculate the duration of a 7-year coupon bond having a 11% coupon rate. The current market yield of…

A: Assuming Face value of bond = 1000 N = 7 years Coupon = Coupon Rate * Face Value = 11%*1000 = 110…

Q: A bond has 10 years until maturity, a coupon rate of 8.1%, and sells for $1,190. Interest is paid…

A: a. Calculation of bond price:Formula used:

Q: Suppose you purchase a $1000 Face-Value Zero-Coupon Bond with maturity 30 years and yield to…

A: Par Value of Bond is $1,000 Time period is 30 years Yield to maturity is 4% To Find: Price of bond…

Q: You have purchased a bond for $973.02. The bond has a coupon rate of 6.4%, pays interest annually,…

A: Given: Coupon rate = 6.4% years = 4 Face value =$1,000 Yield to maturity = 7.2% Bond price = $973.02…

Q: You are looking at a 18-year zero-coupon bond that has a yield to maturity of 5.0%. What is the…

A:

Q: 1,034.28 a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?…

A: The yield to maturity refers to the amount of money that can be obtained from a bond if it is held…

Q: Suppose a five-year face value of $1000 bond with a 9% coupon rate, and coupons are paid…

A: Compound = Semiannually = 2Time = t = 5 * 2 = 10Face Value = fv = $1000Annual Coupon Rate = 9%Annual…

Q: Consider a semi-annual bond that has a par value of 100, a 15-year maturity, a 5% coupon rate.…

A: Bonds are the debt security which is offered or issued by the corporates or the government to…

Q: A bond pays a coupon rate of 8%, has 5 years to maturity and a yield to maturity of 8%. What is the…

A: Macaulay duration is weighted average duration of bond considering the cash flow from bond. It…

Q: Consider a 25-year bond with a face value of $1,000 that has a. What is the coupon payment for this…

A: The bond makes semiannual coupon payments, so there will be 50 coupon payments over the 25-year…