State why you would agree or disagree with the following statement: When interest rates are low, there will be little difference between the Macaulay duration and modified duration measures.
Answer to relevant QuestionsState why you would agree or disagree with the following statement: If two bonds have the same dollar duration, yield, and price, their dollar price sensitivity will be the same for a given change in interest rates. How are spot rates related to forward rates? Answer the below questions. (a) What are the limitations of using Treasury strips to construct the theoretical spot rate curve? (b) When Treasury strips are used to construct the curve, why are only coupon strips used? Answer the below questions. (a) “Empirical evidence suggests that with respect to bond risk premiums that influence the shape of the Treasury yield curve, there is a linear relationship between Treasury average returns ...What is a spot rate?
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