Suppose a bond with 8.5 years of Macaulay duration and 5.5% of yield to maturity, is currently
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Question:
Suppose a bond with 8.5 years of Macaulay duration and 5.5% of yield to maturity, is currently traded at $1,200. If you expect the bond's yield to maturity to decline by 25 basis points or 0.25%. This bond coupon is semi-annually paid.
Identify required:
Modified duration?
Modified duration effect (price change calculated using duration formula)?
Related Book For
Essentials of Investments
ISBN: 978-0077835422
10th edition
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
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