Question: Struggling with letter e. I may be interpreting the question incorrectly. Thanks! Par: 100 Settlement Date: June 13, 2017 Maturity Date : September 13, 2043

 Struggling with letter e. I may be interpreting the question incorrectly.

Struggling with letter e. I may be interpreting the question incorrectly.

Thanks!

Par: 100

Settlement Date: June 13, 2017

Maturity Date : September 13, 2043

Annual Coupon: 6.675

Yield: 4.64

Payments: Semiannual

Current price: $130.70

Again, Letter E is what I am struggling with the most.

Thanks

Many bond calculators are offered on the web. For example, you can find one at Investopedia (www.investopedia.com/calculator/mduration.aspx). Given a bond's parameters, you can find duration with the click of a button. a. Select a bond from The Wall Street Journal online. (Go to www.wsj.com, click on Market Data under the Markets tab, then Rates, and then Corporate Gainers and Decliners under the Rates tab.) b. Enter the bond's characteristics into the duration calculator. c. Confirm the bond's duration using Excel's DURATION or MDURATION functions. (In general, you should always pay attention to whether calculators and spreadsheets are providing duration or modified duration.) d. Based on the bond's current price, by what percent would the price change if the yield were to change by .5%? e. Repeat the calculations by entering assumed prices of 90, 100, and 110; then answer the following questions: i. What is the duration of the bond at the each of the prices? ii. Is the bond price more or less sensitive to interest rates at higher prices or at lower ones

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!