Question: A bond currently sells for 950 based on a par
A bond currently sells for $950 based on a par value of $1,000 and promises $100 in interest for three years before being retired. Yields to maturity on comparable-quality securities are currently at 12 percent. What is the bond’s duration? Suppose interest rates in the market fall to 10 percent. What will be the approximate percent change in the bond’s price?
Answer to relevant QuestionsSpiro Savings Bank currently holds a government bond valued on the day of its purchase at $5 million, with a promised interest yield of 6 percent, whose current market value is $3.9 million. Comparable quality bonds are ...A corporate bond being seriously considered for purchase by Old Dominion Financial will mature 20 years from today and promises a 7 percent interest payment once a year. Recent inflation in the economy has driven the yield ...A bank’s economics department has just forecast accelerated growth in the economy, with GDP expected to grow at a 4.5 percent annual growth rate for at least the next two years. What are the implications of this economic ...What guidelines should management keep in mind when it manages a financial firm’s liquidity position?What is the principal goal of money position management?
Post your question