Calculate the duration of a 12 percent coupon bond with 10 years remaining to maturity and selling
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Calculate the duration of a 12 percent coupon bond with 10 years remaining to maturity and selling at par. Use annual interest rates. Given the duration calculated, calculate the percentage change in bond price if the market discount rate for this bond declines by 0.75 percent.
CouponA coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Therefore the duration is 633 years Approximate change in bond price D 1YTM poin...View the full answer
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