A 1000 bond that pays annual coupons at 45 redeems at par


A $1000 bond that pays annual coupons at 4.5% redeems at par in exactly 3 years from now. If the yield to maturity is currently 5%, calculate the price change (?P), predicted by modified duration, for a 100 basis point decrease in yield.

Solution Preview :

Prepared by a verified Expert
Engineering Mathematics: A 1000 bond that pays annual coupons at 45 redeems at par
Reference No:- TGS01590078

Now Priced at $10 (50% Discount)

Recommended (96%)

Rated (4.8/5)