A bond currently sells for $1,050, which gives it a YTM of 6%. Suppose that if the

Question:

A bond currently sells for $1,050, which gives it a YTM of 6%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,025. What is the duration of this bond?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

See More Books

Question Posted: May 14, 2012 05:26 AM

See More Questions

A bond currently sells for $950 based on a par value of $1000 and promises $100 in interest for 3 years before being retired. Yields to maturity on comparable-quality securities are currently at 12%....
A 30 year 9% coupon bond currently sells for $100. A 30 year 3% coupon bond with exactly the same coupon dates and maturity currently sells for $50. both bonds have $100 as the principal at maturity....
A 10-year, 8% coupon bond currently sells for $90. A 10-year, 4% coupon bond currently sells for $80. What is the 10-year zero rate? (Hint: Consider taking a long position in two of the 4% coupon...
Cost information for Lake County Library is as follows. In addition to directly traceable costs, the library incurred $24,000 for a building lease. REQUIRED A. Allocate to departments any costs that...
a. Use the Dynamic Mattress model (Tables 29.8 - 29.10) and the spreadsheets on the book's website at www.mhhe.com/bma to produce pro forma income statements, balance sheets, and statements of cash...
Oregon Exchange Company completed the following long-term investment transactions during 2021: At year-end, the fair value of the Columbus stock is $30,100. The fair value of the Nashua stock is...
In a jet condenser (a) steam and cooling water mix together (b) steam and cooling water do not mix together (c) steam passes through tubes and cooling water surrounds them (d) cooling water passes...
Yount Co. has equipment that cost $50,000 and that has been depreciated $22,000. Record the disposal under the following assumptions. (a) It was scrapped as having no value. (b) It was sold for...
Your grandfather has an annuity that is worth $ 9 9 3 8 4 today. It will give him monthly payments for 2 4 years. If the rate is 4 . 4 5 % , what will be his monthly payment? Show work and formula
Sandy and John Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2022, Sandy worked as a computer technician at a local university, earning a salary of $152,000,...
Suppose you have $500 in savings when the price level index is at 100. (a) If inflation pushes the price level up by 10 percent, what will be the real value of your savings? (b) What is the real...
How long will it take your $10,000 to double in value if it earns 5% annually?
Find the sum of the convergent series. 9-3+1+...
Assuring that the consent agreement procedure follows guidelines for social work within an organization for the use of social media and technology Explain how HIPAA and HITECH would be used in an...
Explain the differences and similarities between processes and threads. How are they similar? What differentiates them?
Purchase Price: $15M, 12,500SF, GPR: $44.50, 10-year hold period, Full Service Lease - at year 5 Expense Stop and turns to a NNN lease, Operating Expenses $14.50/SF, LTV 50%, 10-year treasury 4.75%,...
1. (a) A company may change its name by a special reduction and with the approval of the registrar signified writing . In view of the foregoing statement discuss the procedure of changing a name of...
Year Cash Flow 0 -$200 1 50 2 60 3 70 4 200 Given the above cashflows of a project, calculate its payback, discounted payback, IRR, NPV, profitability index. Assume the discount rate is 9%. Show your...
Has the law against retaliation gone too far? How can an employer prevent the shunning of an employee who remains in the workplace and has filed a claim against the employer?
Why is the national security argument for tariffs questionable?
Classify each number in Problems 1116 as rational or irrational. If it is rational, write it without a square root symbol. If it is irrational, approximate it with a rational number correct to the...
Using the historical risk premiums over the 19572012 period as your guide, if the current risk-free interest rate is 3 percent, what is your estimate of the expected annual HPR on the S&P/TSX...
Suppose that your risky portfolio includes the following investments in the given proportions: Stock A: ...... 27 percent Stock B: ...... 33 percent Stock C: ...... 40 percent What are the investment...
Suppose that your risky portfolio includes the following investments in the given proportions: Stock A: ...... 27 percent Stock B: ...... 33 percent Stock C: ...... 40 percent What are the investment...
Establishment Industries borrows $1,040 million at an interest rate of 7.2%. It expects to maintain this debt level into the far future. Establishment will pay tax at an effective rate of 38%. What...
The Presentation Layer ER Diagram shown in conjunction with part a below is focused around students who participate in sports and also enroll in classes. Please base your answer to this question on...
The current price of one share of XYZ stock is 56.50. A long straddle (one long call and one long put) on the stock with a strike price of K and one year to expiration has a total cost of 12.00. The...

A bond currently sells for $1,050, which gives it a YTM of 6%. Suppose that if the

Question:

Step by Step Answer:

Given information Par Value 100000 YT...View the full answer

Fundamentals of Corporate Finance

Students also viewed these Accounting questions