Consider a bond with a coupon of 6.6 percent, seven years to maturity, and a current price

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Consider a bond with a coupon of 6.6 percent, seven years to maturity, and a current price of $1,069.40. Suppose the yield on the bond suddenly increases by 2 percent.

a. Use duration to estimate the new price of the bond. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Calculate the new bond price using the usual bond pricing formula. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Posted Date: May 18, 2024 07:05 AM

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Consider a bond with a coupon of 6.6 percent, seven years to maturity, and a current price

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