A bond has three years to maturity. Its coupon rate is 6 % and it pays just

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

Question:

A bond has three years to maturity. Its coupon rate is

6 %

and it pays just once per year. Its face value is

1, 000

.

At its yield to maturity of

5 %,

it is priced at $

1, 041 .

Compute the duration of this bond

Related Book For answer-question

Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

See More Books

Posted Date: Feb 27, 2024 12:31 AM

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...
Bryce owns 200 shares of Basic Company stock that he purchased for $8,000 three years ago. On December 28, 2021, Bryce sold 100 shares of the stock for $2,500. On January 3, 2022, Bryce repurchased...
If the rms value of the electric field in an electromagnetic wave is doubled, (a) By what factor does the rms value of the magnetic field change? (b) By what factor does the average intensity of the...
Suppose that a polynomial function of degree 4 with rational coefficient has the given numbers as zeros Find the other zero(s)? a. - 1, (3, 11/3 b. - (2, - 1, 4/5 c. - i, 2 - (5
Two key performance indicators for a company are profitability and solvency. Why are these so important? Is the value of accrual accounting more evident when centered on profitability or solvency?
Mississippi Manufacturing, Inc., reported the following at December 31, 2014 and December 31, 2015: Stockholders Equity Preferred stock, cumulative, $2.00 par, 6%, 70,000 shares issued .... $ 140,000...
Use integration by substitution to find the indefinite integral in part (a) and to evaluate (to 2 d.p.) the definite integral in part (b). In part (b), you may use the approximation e 2.71828 in the...
A particle, which remains at rest, is acted on by three forces F, G and H. The force F has magnitude 7 N and is directed to the right and down, making an angle of 55 with the vertical. The force G...
Assume 4 LANs are connected by bridges as shown below figure and mac address table at each bridge is initially empty. Use following table to show updated mac address table. At bridge 1: At bridge 2:...
Solution guidelines For problems that require you to provide an algorithm, you must provide: 1. pseudocode and, if helpful, a precise description of the algorithm in English. As always, pseudocode...
NB: design the two types of automated system that you studied during your lab visit. Make sure that you demonstrate the different between the two types of automated pneumatic system. 3. Method...
Department -name: String +getName(): String +setName(n: String) 1.." manage Company -name: String +getName(): String +setName(n: String) 1 managedBy Employee -name: String -title: String +getName():...
Why is important to consider an entrepreneur's personal finances when conducting the short- and long-term financial forecast of a firm?
The following table shows the rates of total return in successive years from 2004 to 2008 for the Sprott Canadian Equity Fund and for the benchmark Toronto Stock Exchange S&P/TSX Composite Index. By...
Examine the historical volatility of Pfizer (PFE) stock.
Consider the following inputs to the Black-Scholes option pricing model: These input values yield a call option price of $6.78 and a put option price of $1.03. Verify these prices from your own...
Determine which countries have the highest/lowest level of inflation.
In Appendix 16A.1, we illustrate the calculation of a standard error for the marginal effect in a probit model of transportation, Example 16.4. In the appendix, the calculation is for the marginal...
In Example 16.3, we illustrate the calculation of the likelihood function for the probit model in a small example. a. Calculate the probability that $y=1$ if $x=1.5$, given the values of the...
In Examples 16.2 and 16.4, we presented the linear probability and probit model estimates using an example of transportation choice. The logit model for the same example is \(P(A U T...

A bond has three years to maturity. Its coupon rate is 6 % and it pays just

Question:

Expert Answer:

To calculate the duration of a bond we need to use the following formula Duration 1 y y 1 y ... View the full answer

Fundamentals Of Investments Valuation And Management

Students also viewed these finance questions