A bond has a Macaulay's duration of 12.2 years. If rates change from 6.4% to 5.5%, what

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

Question:

A bond has a Macaulay's duration of 12.2 years. If rates change from 6.4% to 5.5%, what will the %age change bond price? Show the working

Related Book For answer-question

Essentials of Investments

ISBN: 978-0077835422

10th edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

See More Books

Posted Date: Nov 27, 2023 11:30 PM

See More Questions

KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
(b) (i) A long single mode optical fiber has an attenuation of 0.40 dBkm when operating at a wavelength of 1.55 m. The fiber core diameter is 6 pm and the laser source bandwidth is 500 MHz. Determine...
How does a balloonist control the vertical motion of a hot-air balloon?
In what situation will there be a common year-end for the principal partners when there is no majority interest taxable year?
The income statement and additional data of Capitol Hill Corporation follow: Additional data: a. Collections from customers are Si 5,000 more than sales. b. Dividend revenue, interest expense, and...
Reporting Net Sales with Credit Sales, Sales Discounts, and Credit Card Sales The following transactions were selected from the records of OceanView Company: July 12 Sold merchandise to Customer R,...
Determine the total cost pool for the FINISHING department after allocating the costs from the support departments using the reciprocal method Determine the total cost pool for the ASSEMBLY...
Holmes Corporation is a leading designer and manufacturer of material handling and processing equipment for heavy industry in the United States and abroad. Its sales have more than doubled, and its...
Describe genomics and proteomics.
Determine the missing amounts. (Use 360 days for calculation.) Date of Note Terms Maturity Date Principal Annual Interest Rate April 60 $750,000 8% $ (a) 1 days 30 % Cei 84,000 (b) July 2 days March...
Information concerning Valnet Corporation's intangible assets is as follows: a. On January 1, 2019, Valnet signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial...
17. A concave mirror produces a real image 10mm tall, of an object 2.5mm tall placed at 5cm from the mirror. Calculate focal length of the mirror and the position of the image. 18. An object is...
Martine finds herself in debt after losing her job and exhausting her emergency fund. She has begun an new career and she wants to get her debt under control. She owns a condo and it is currently...
Create a context level DFD for Pine Valley Furniture. Create a Level 0 DFD for Pine Valley Furniture.
AN ASSET MANAGER WISHES TO ENTER INTO A TWO-YEAR EQUITY SWAP IN WHICH HE WILL RECEIVE THE RATE OF RETURN ON THE FTSE/JSE ALL SHARE INDEX (ALSI) IN EXCHANGE FOR PAYING A FIXED INTEREST RATE (SWAP...
Arlington Merchants reported the following on its income statement for the fiscal years ending December 31, 2016 and 2015. 2016 2015 Sales $4,857,500 $4,752,900 Cost of goods sold 3,258,950 3,207,000...
Consider a bond with a settlement date of February 22, 2015, and a maturity date of March 15, 2023. The coupon rate is 5.5%. If the yield to maturity of the bond is 5.34% (bond equivalent yield,...
You purchase one Facebook October $80 put contract for a premium of $5.72. What is your maximum possible profit? (See Figure 15.1.) FIGURE 15.1 Options on Facebook, October 16, 2014 Underlying stock...
Sandra Kapple presents Maria VanHusen with a description, given in the following exhibit, of the bond portfolio held by the Star Hospital Pension Plan. All securities in the bond portfolio are...
A shaft running at $500 \mathrm{rpm}$ carries a pulley $1 \mathrm{~m}$ diameter and drives another pulley by means of ropes with a speed ratio of 2:1. The drive transmits $200 \mathrm{~kW}$....
A flat belt drive is required to transmit $20 \mathrm{~kW}$ at $300 \mathrm{rpm}$ of $2 \mathrm{~m}$ diameter pulley. The angle of contact is $170^{\circ}$ and coefficient of friction between...
If the difference between tight and slack side tensions for a leather belt does not exceed $100 \mathrm{~N} / \mathrm{cm}$ of width for a belt $5 \mathrm{~mm}$ thick, find the maximum stress in...

A bond has a Macaulay's duration of 12.2 years. If rates change from 6.4% to 5.5%, what

Question:

Expert Answer:

The percentage change in bond price can be estimated using the modified duration fo... View the full answer

Essentials of Investments

Students also viewed these banking questions