With the uncertain outlook for inflation, you recognize that yields to maturity might fall or rise...
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With the uncertain outlook for inflation, you recognize that yields to maturity might fall or rise rapidly and unexpectedly. You want to estimate now how bond prices might change in the face of a changing YTM. To do this, you know that you need both a bond's current price and its modified duration to complete the estimate. In particular, you are looking at a $1,000 face (par) value bond by Drop-Me-Here, Inc. The bond has 3 years until maturity, a coupon of 4.0% paid semiannually, and a current 5.6% YTM. What is the current price of the bond? $1,015.61 $1,045.28 $956.37 $901.22 $965.98 With the uncertain outlook for inflation, you recognize that yields to maturity might fall or rise rapidly and unexpectedly. You want to estimate now how bond prices might change in the face of a changing YTM. To do this, you know that you need both a bond's current price and its modified duration to complete the estimate. In particular, you are looking at a $1,000 face (par) value bond by Drop-Me-Here, Inc. The bond has 3 years until maturity, a coupon of 4.0% paid semiannually, and a current 5.6% YTM. What is the current price of the bond? $1,015.61 $1,045.28 $956.37 $901.22 $965.98
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