The company has an obligation and is paying a single payment debt in 12 years Debt (obligation paid 12 years) $13,000,000 00 Rate Maturity (in years) Price YTM Coupon Freq Bond 1 8 10 1,000 075 Semi Annual Bond 2 6 20 800 075 Semi Annual Bond 3 4 30 600 075 Semi Annual A) Find the Macauly Duration ...

A Mac aul ay s duration is a measure of a bond s sensitivity to changes in interest rates It is calculated as the weighted average of the time until e ...

The company has an obligation and is paying a single payment debt in 12 years. Debt (obligation

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The company has an obligation and is paying a single payment debt in 12 years.

Debt (obligation paid 12 years)

$13,000,000.00

	Rate	Maturity (in years)	Price	YTM	Coupon Freq
Bond 1	8%	10	1,000	.075	Semi-Annual
Bond 2	6%	20	800	.075	Semi-Annual
Bond 3	4%	30	600	.075	Semi-Annual

A) Find the Macauly Duration for each bond

B) Calculate the PV of Obligation

C) Pick 2 bonds and apply the immunization process using the given YTM. Find the quantity of each of the 2 bonds to achieve the obligation.

Related Book For answer-question

Accounting for Governmental and Nonprofit Entities

ISBN: ?978-0073379609

15th Edition

Authors: Earl R. Wilson, Jacqueline L Reck, Susan C Kattelus

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Posted Date: Nov 24, 2020 07:30 AM

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The company has an obligation and is paying a single payment debt in 12 years. Debt (obligation

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Accounting for Governmental and Nonprofit Entities

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