Question: Use the quick formula to find the approximated duration from a 10 basis point change in yield, note you will need to find the change

Use the quick formula to find the approximated duration from a 10 basis point change in yield, note you will need to find the change in the price up and down using the bond pricing formula. (4 digits after the decimal).

	Bond ABC
Coupon	4.00%
Yield to maturity	3.00%
Maturity (years)	6
Par	$100.00
Price per par	$105.4538
Face value	1000

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!

Please solve and show work! Use the quick formula to find the approximated duration from a 10 basis point change in yield, note you will need to find the change in the price up and down using the...

Use the quick formula to find the approximated convexity from a 10 basis point change in yield, note you will need to find the change in the price up and down using the bond pricing formula. (2...

Question Find the equilavent years to maturity ofa zero-coupon bond to one that has a coupon rate of 8.60%, 5 years to maturity and a yield to maturity of 9.20% Find the equilavent years to maturity...

A 2 0 year 4 % coupon bond is currently selling at a price of $ 1 0 3 . 5 0 . This bond has a face value of $ 1 0 0 . Find the duration and convexity of this bond using the approximate formulas ( use...

GE has an outstanding bond issue that is currently selling for $110.21 to yield 6.59%. The bond pays a semi-annual coupon of 8% and will mature in 10 years. Find the convexity of this bond using the...

use of financial calculator is only permitted NO EXCEL NO AI and explain steps MUST BE HANDWRITTEN GE has an outstanding bond issue that is currently selling for $110.21 to yield 6.59%. The bond pays...

A 20 year 4% coupon bond is currently selling at a price of $103.50. This bond has a face value of $100. Find the duration and convexity of this bond using the approximate formulas (use 10 basis...

PART A. A QUESTIONS IN THIS SECTION ARE COMPULSORY. Question 1 (25 marks) Asakabank enters into an interest rate swap denominated in local currency UZS. Asakabunk aims to hedge its interest rate risk...

Given the following explanations with correct answers Exercise 5.7 Compute the dirty price, the duration, the modified duration, the $duration and the BPV (basis point value) of the following bonds...

verify the KKT necessary conditions for the solution points and study the effect on the cost function of changing the boundary of the active constraint(s) by one unit. Minimize f(x1, x2) = 9x- - 18x1...

A foreign operation has the following local inflation rates: Year 1: 10% Year 2: 20% Year 3: 30% Year 4: 10% Year 5: 15% What is the applicable cumulative inflation rate.That should be used for...

Convertible preferred stock can be converted into cash. bonds. additional preferred stock. common stock.

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".