by the par, value. issued . Suppose you find a bond with 25 years to maturity...
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by the par, value. issued . Suppose you find a bond with 25 years to maturity 6 years ago today that has a coupon rate of 8% paid semi-annually and a yield to maturity of 7%. a. What is the Macaulay Duration? Show all work. 2pts b. Assume the bond increases by 25 basis points, what is the new price using Macaulay's duration? Show all work. 2pts c. Compare the Macaulay's duration-based price change of the bond to the regular bond pricing approach. How effective was did estimate of the price change do? Show all work. 3pts by the par, value. issued . Suppose you find a bond with 25 years to maturity 6 years ago today that has a coupon rate of 8% paid semi-annually and a yield to maturity of 7%. a. What is the Macaulay Duration? Show all work. 2pts b. Assume the bond increases by 25 basis points, what is the new price using Macaulay's duration? Show all work. 2pts c. Compare the Macaulay's duration-based price change of the bond to the regular bond pricing approach. How effective was did estimate of the price change do? Show all work. 3pts
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