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zlopas [31]
3 years ago
9

The duration of a ten-year, 10 percent coupon bond when the interest rate is 10 percent is 6.76 years. What happens to the price

of the bond if the interest rate falls to 8 percent?
Chemistry
1 answer:
yawa3891 [41]3 years ago
7 0

Answer:

%DP=12.3% increment

Explanation:

The duration of a ten-year, 10 percent coupon bond when the interest rate is 10 percent is 6.76 years. What happens to the price of the bond if the interest rate falls to 8 percent?

We go by the formula.

As the calculation in tables(on the internet), the duration of a ten-year 10% coupon  bond is 6.76 years.

%DP=-6.76*\frac{di}{1+i}......................................................................1

duration=6.76

di=change in interest=0.08-0.1

i=initial interest rate, 10%

Juxtaposing the parameters into the given equation

-6.76*(-0.18)/1.1

%DP=12.29

%DP=12.3% in approximation

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Explanation:

The relation between energy and wavelength of light is given by Planck's equation, which is:

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where,

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338\times 1000J=\frac{6.023\times 10^{23}\times 6.6\times 10^{-34}\times 3\times 10^{8}}{\lambda}    

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If 185 mg of acetaminophen were obtained from a tablet containing 350 mg of acetamino- phen, what would be the weight percentage
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