Question: 1.A zero coupon bond maturing in 8 years drops 10% in value. How much has the yield risen for this bond during the same period?

1.A zero coupon bond maturing in 8 years drops 10% in value. How much has the yield risen for this bond during the same period?

2.When yield rises by 50 basis points, the bond price drops from 1000 to 920. Its modified duration is closest to how many years?

3.Which of the following bonds might have a conversion factor of 1.05?

  • A.3% coupon bond
  • B.6% coupon bond
  • C.5% coupon bond
  • D.7% coupon bond
  • E.4% coupon bond

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