4 . What is the duration of a four-year, $1,500 bond that pays a coupon (annual) of...

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4. What is the duration of a four-year, $1,500 bond that pays a coupon (annual) of 12% that trades at a yield of 16%. Calculate is the expected change in the bond’s price if interest rates fall by 0.70 percent (70 basis points)?

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Financial Institutions Management A Risk Management Approach

ISBN: 978-0071051590

8th edition

Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders

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Posted Date: Mar 14, 2024 03:40 AM

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4 . What is the duration of a four-year, $1,500 bond that pays a coupon (annual) of...

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Expert Answer:

To find the duration of the bond well use the formula for Macaulay duration Duration sumt1n tC1 yt i... View the full answer

Financial Institutions Management A Risk Management Approach

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