Question: Please help me!!! Thank you QUESTION 1 10 points Save Answer What is the convexity of an instrument paying $1000 in year 2 and another
Please help me!!! Thank you
QUESTION 1 10 points Save Answer What is the convexity of an instrument paying $1000 in year 2 and another $1000 in year 4 if the required rate of return is 10%? 2.90 years 3.47 years 4.00 years 6.17 years QUESTION 2 10 points Save Answer Consider a company which just paid a $2.00 dividend and assume that the constant dividend growth model applies to the company. If dividends are expected to grow at 3% per year and investors require a 14% return, what is the stock s modified duration? 8.14 years 9.09 years 10.36 years 14 years QUESTION 3 10 points Save Answer Consider a 12 year zero coupon bond. If interest rates go from 8% to 9% then, using the duration approximation, what is the percentage change in the bond s price? 0 -11.11% 0 -12% +11.11% +12%
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
