. Consider a 2-year, risk-free bond with a coupon rate of 6% (annual coupons) and a face...
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. Consider a 2-year, risk-free bond with a coupon rate of 6% (annual coupons) and a face amount of $1,000. a. If the yield on the bond is 6% (P = $1,000),What is the Macaulay duration? b. If the yield increases to 7% immediately, what does the duration approximation predict will be the percentage change in the bond price? c. If the yield increases to 7% immediately, what is the actual percentage change in the bond price?
Related Book For
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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