Question: Consider a 30-year Bond with $1,000 face value, which offers 10% annual coupon, paid once a year. Assume that interest rates, hence YTM (Yield to

Consider a 30-year Bond with $1,000 face value, which offers 10% annual coupon, paid once a year.

Assume that interest rates, hence YTM (Yield to Maturity) changed from 6% to 7%.

What is the duration of the Bond in years? Enter your answer in the following format: 12.34 Hint1: Answer is between 10.24 and 12.77 Hint2: Duration = (new bond price - old bond price) * (-100) / old bond price

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Consider two Bonds: Ford Motor Company's Bond has $1,000 face value, 10-year maturity, pays 5% annual coupon once a year. Tesla's Bond has $1,000 face value, 10-year maturity, pays 10% annual coupon...

Question 3 One year ago, Carson Industries issued a 10-year, $1,000 PAR coupon bond at its PAR value. This Bond's annual coupon rate is 13%. Coupons are paid 2 times in a year. The Bond is currently...

1. When it comes to financial matters, the views of Aristotle can be stated as: a. usury is nature's way of helping each other. b. the fact that money is barren makes it the ideal medium of exchange....

Answer the following question shown the picture down below 6-1 to 6-20 6-7. Tracer Manufacturers issued a 10-year bond six years ago. The bond's maturity value is $1.000. and its coupon interest rate...

Please provide the correct answer and explanation as well. Thank you 5. The Dividend Discount Model (DDM) a. is a valuation model only for companies that have paid dividends b. is a dividend...

1.LO3 Bond FeaturesMaturity (years)5Face Value =$1,000Coupon Rate =5.00%Coupon dates (Annual)Marketinterest rate today5.00%Time to call (years)3Price if Called$1,050.00Marketinterest rate in Year...

Question 10 Suppose the US government is issuing a $1,000 PAR value coupon bond today. This bond will mature in 3 years from today. This Bond's annual coupon rate is 10%. Coupons are paid 1 time(s)...

Consider two Bonds with $1,000 face value: 10-year and 30-year maturity. Both Bonds offer 10% annual coupon, paid once a year. Assume that interest rates, hence YTM (Yield to Maturity) changed from...

solve without using excell Consider two Bonds with $1,000 face value: 10-year and 30-year maturity. Both Bonds offer 10% annual coupon, paid once a year. Assume that interest rates, hence YTM (Yield...

How are you, as an owner/manager, involved in behavior modeling?

Write a literature review on Crime in the Bahamas?

Which one of the following would be considered a contingent liability? Group of answer choices A company has $ 9 8 0 , 0 0 0 worth of bonds outstanding The company has access to a line of credit with...

5. Develop a scenario comparing two PH programs and involving the use of a CBA.

1. To what extent do you think the organisations mentioned here would benefit from using the Health and Safety Executives stress management standards as a part of their stress policies?

describe the Health and Safety Executives approach to stress management.

3. Do you think that measures of health, safety and wellbeing should be included as a part of the balanced scorecard approach in organisations?