1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
aleksley [76]
3 years ago
14

A bond currently sells for $1,050, which gives it a yield to maturity of 6%. Suppose that if the yield increases by 25 basis poi

nts, the price of the bond falls to $1,025. What is the modified duration of this bond? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Duration years
Business
1 answer:
Fittoniya [83]3 years ago
6 0

Answer:

9.52 years

Explanation:

Calculation for the modified duration of this bond

First step is to calculate the Percentage decrease in Price of Bond

Percentage decrease in Price of Bond =($1,025-$1,050)/$1,050

Percentage decrease in Price of Bond=-2.3810%

Second step is to calculate the Percentage change in price

Using this formula

Percentage change in price =-Modified Duration*Change in YTM

Let plug in the formula

-2.3810% =-Modified Duration*0.25%

Modified Duration =2.3810%/0.25%

Modified Duration =9.52 years

Therefore the modified duration of this bond is 9.52 years

You might be interested in
XYZ Inc. pursues a low-cost strategy in its industry and generally needs lower skilled employees. As a result, their management
Darya [45]

Answer:

B) market lag

Explanation:

Every profession usually has an average remuneration price, which is considered the market price. Some companies seeking more skilled workers offer compensation above market salary, others, such as the low-cost company XYZ, offer salaries below market level. This strategy is called a market lead. Companies with market lead policies often have higher employee turnover, as finding a higher-paying job tends to change jobs.

8 0
4 years ago
Why do you think it is important to choose the correct Business organization
dexar [7]

Not choosing the correct business organization to set up would become very costly for an individual hoping to start operations and this would result in business failure even before the business began operations.

3 0
3 years ago
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of
Vesnalui [34]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

7 0
3 years ago
The level of CQ among senior leaders is the most consistent variable linked to whether or not an organization functions in the w
pashok25 [27]
It is true because It is true because
8 0
4 years ago
After harvesting, many entrepreneurs who remain with their firm as an employee experience _____ conflicts
crimeas [40]

After harvesting, many entrepreneurs who remain with their firm as an employee experience Emotional and Cultural conflicts.

An entrepreneur is someone who starts a new business, takes most of the risks and reaps the maximum benefits. The process of starting a business is known as entrepreneurship. Entrepreneurs are generally seen as innovators, sources of new ideas, products, services and businesses/processes.

An entrepreneur is someone who starts a new business, usually risking their own money to start a business. Examples of notable entrepreneurs include Bill Gates, Steve Jobs, Mark Zuckerberg, Pierre Omidia, Arianna Huffington and Katerina Fake.

Learn more about entrepreneurs  here: brainly.com/question/353543

#SPJ4

3 0
2 years ago
Other questions:
  • Which federal law allows an insurer to obtain an inspection report on a potential insured?
    5·1 answer
  • 1. The government is mulling protecting the shoe industry. It estimates it needs to protect it for 6 years to the tune of $5 bil
    6·1 answer
  • Klingon Widgets, Inc., purchased new cloaking machinery four years ago for $8 million. The machinery can be sold to the Romulans
    14·1 answer
  • I need to write a balance sheet but I am having trouble with the format. can anyone please help?
    7·1 answer
  • If private investment is relatively sensitive to interest rates, then a fiscal expansion financed by government bond sales will:
    8·1 answer
  • If average annual income for all workers is $37,000 and a person with a bachelor’s degree can expect to earn 32 percent more tha
    14·1 answer
  • In March, Kelly Company had the following unit production costs: materials $12 and conversion costs $8. On March 1, it had no wo
    13·1 answer
  • Say the marginal tax rate is 30 percent and that government expenditures do not change with output. Say also that the economy is
    10·1 answer
  • An arena makes profits of $150,000, $75,000, and $1,250,000 from concerts, circuses, and UFC events, respectively. What are the
    13·1 answer
  • Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. real gdp will _____ by _____.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!