Bond X has a Macaulay duration of 5 years and a yield of 6 percent assuming coupon
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Question:
Bond X has a Macaulay duration of 5 years and a yield of 6 percent assuming coupon payment is made annually and coupon rate of 2 percent. Calculate the Modified duration of Bond X.
If interest rate is expected to increase by 25 basis points (100 basis points is equivalent to 1%).
What is the percentage change in the price of Bond X? .
Related Book For
Essentials of Investments
ISBN: 978-0078034695
9th edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus
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