Show all your work. Circle your answer choice. If you solve the problem with a financial calculator
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Show all your work. Circle your answer choice. If you solve the problem with a financial calculator list your N, I/YR, PMT, PV, and FV inputs.
Bond 1 is a 5-year annual bond with a face value of $1,000, a coupon rate of 8%, and a yield to maturity of 7%. Bond 2 is a 20-year zero-coupon bond with a face value of $1,000 and an annually compounded yield to maturity of 4%.
1. What is the price of Bond 1?
2. What is the price value of a basis point of Bond 1?
3. What is the modified duration (MD) of Bond 1?
Expert Answer:
Answer rating: 100% (QA)
SOLUTION Step1 Bond Price means present value of future cash inflo... View the full answer
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