Question: Use this data to answer questions . (assume that each bond pays interest semiannually): Bond A Bond B Coupon 6% 7% Yield to maturity 6%
Use this data to answer questions. (assume that each bond pays interest semiannually):
| Bond A | Bond B | |
| Coupon | 6% | 7% |
| Yield to maturity | 6% | 6% |
| Maturity (years) | 2 | 5 |
| Par | $100.00 | $100.00 |
| Price | $100.00 | $104.265 |
Using modified duration, calculate % change in price of the two bonds if the yield goes down by 10 basis point.
A) 0.252, 0.448
B) 0.186, 0.421
C) 0.336, 0.665
D) 0.256, 0.566
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