Assume there is a bond with a $1000 par value and 13% coupon rate, three years remaining

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Assume there is a bond with a $1000 par value and 13% coupon rate, three years remaining to maturity and a 11% yield to maturity. Then, the IRs changes and required rate of return increases to 12%. Please estimate the percentage change in the bond price by using the modified duration formula first. And then compare it to the actual percentage change in price. (Calculate also the actual price change.) show all your steps clearly.

Posted Date: May 18, 2024 08:13 AM

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Assume there is a bond with a $1000 par value and 13% coupon rate, three years remaining

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