An investor wants to find the duration of a(n) 15-year, 5% semiannual pay, noncallable bond that's currently priced in the market at 3518.23, to yield 12%. Using a 250 basis point change in yield, find the effective duration of this bond (Hint use Equation 11.11). The new price of the bond if the market interest rate decreases by 250 basis points (or 2.5% ) is: □ (Round to the nearest cent.)
An investor wants to find the duration of a(n) 15-year, 5% semiannual pay, noncallable bond that's currently priced in the market at 3518.23, to yield 12%. Using a 250 basis point change in yield, find the effective duration of this bond (Hint use Equation 11.11). The new price of the bond if the market interest rate decreases by 250 basis points (or 2.5% ) is: □ (Round to the nearest cent.)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter12: Investing In Stocks And Bonds
Section: Chapter Questions
Problem 6FPE
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