What is the maximum price of a bond?
Answer to relevant QuestionsWhat is the “dirty” price of a bond? Suppose that a portfolio manager purchases $10 million of par value of an eight-year bond that has a coupon rate of 7% and pays interest once per year. The first annual coupon payment will be made one year from now. How much ...What is the limitation of using the internal rate of return of a portfolio as a measure of the portfolio’s yield? Assuming the following yields: Week 1: 3.84% Week 2: 3.51% Week 3: 3.95% (a) Compute the absolute yield change and relative yield change from week 1 to week 2. (b) Compute the absolute yield change and relative yield change ...The price value of a basis point will be the same regardless if the yield is increased or decreased by 1 basis point. However, the price value of 100 basis points (i.e., the change in price for a 100-basis-point change in ...
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