ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%.  Assuming the bond is issued at par and pay annual coupon, what is a Macaulay duration of this bond?

а) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%.  Assuming the bond is issued at par and pay annual coupon; Using the Macaulay duration by what percentage will the price of the bond change if its yield to maturity decreases by 1%?

b) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%.  Assuming the bond is issued at par and pay annual coupon, what is a modified duration of this bond? 

c) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%.  Assuming the bond is issued at par and pay coupon on semiannual basis, what is a modified duration of this bond? 

d) ABC corporation sold $100 million of 5-year bonds with a yield to maturity of 6%.  Assuming the bond is issued at par and pay coupon on semiannual basis; Using the modified duration by what percentage will the price of the bond change if its yield to maturity decreases by 1%?

Answer rating: 100% (QA)

what is a Mac aul ay duration of this bond ANS WER The Mac aul ay duration of a bond is the weighted average of the times until each cash flow from th... View the full answer