A zero-coupon bond with $1000cash flow at end of five years has initial yield of10%.Suppose the yield
Question:
A zero-coupon bond with $1000 cash flow at end of five years has initial yield of 10%. Suppose the yield to maturity decreases by 0.8%. The convexity of the zero-coupon is 12.40.
What is the change in the price of the zero-coupon security attributed to duration and convexity? Give answer to four decimal places.
Group of answer choices
23.0717
22.2761
+22.0861
-19.3441
22.9982
A zero-coupon bond with $1000 cash flow at end of five years has initial yield of 10%. Suppose the yield to maturity decreases by 0.8%. The convexity of the zero-coupon is 12.40.
Calculate the actual (not the approximate) change in price using the present value method.
Group of answer choices
23.0801
24.0001
23.9883
23.5433
-19.3341
A 10% coupon-rate Eurobond is currently priced at par. The par value is $1,000. The modified duration of the Eurobond is 4.16. You are a risk manager and ask, ‘If the required credit risk premium increases by 4%, what is the change in price of this Eurobond?”. You focus only on duration effect. Hint: In this case, the yield to maturity changes owing to the change in the credit risk premium.
Group of answer choices
-96.00
-129.20
+278.30
– 166.40
- 246.40
The discount rate for the US T-bill that was issued on October 12, 2023 and maturing on January 11, 2023 is 5.340%.
What is the price that is paid if one buys that T-bill? Answer to six decimal places.
Group of answer choices
98.876581
98.650167
98.183421
98.002176
98.991132
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