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
Alchen [17]
3 years ago
7

An 8%, 15-year bond has a yield to maturity of 10% and duration of 8.05 years. If the market yield changes by 25 basis points, h

ow much change will there be in the bond's price?
Business
1 answer:
Mama L [17]3 years ago
4 0

Answer:

-2.01%

Explanation:

Modified duration = 8.05 years

Market yield = 0.25%

Initial yield to maturity = 10%

As per the price change and duration formula,

Change in price/Price of bond = - Modified Duration * Change in yield

Change in price/Price of bond = - 8.05 * 0.0025

Change in price/Price of bond = -0.020125

Change in price/Price of bond = -2.01%

Thus, if the market yield increases by 25 basis points, there will be a - 2.01% change in bond's price due to duration

You might be interested in
Jim wants to buy a car, but he’ll probably only need it for a couple of years. He has a short commute to work, so he won’t be pu
Sergio039 [100]
Assuming that the amount of money he buys the car for + gas, maintenance, etc. costs outweighs the cost saved by biking or public transportation (if he's OK with doing those two), he should probably consider walking, biking, or using public transportation for those few years
5 0
3 years ago
Read 2 more answers
Joan sells new cars at a local dealership. she receives a 25% commission on the profit each car is sold for. last month she sold
Usimov [2.4K]
Okay. So Joan receives 25% commission on the profits of the cars she sells. She got $8,870 on the profit last month. To find the commission, let’s multiply the amount of profit by the percentage. 8,870 * 0.25 is 2,217.5. There. Joan earned $2,217.50 in commission last month.
6 0
4 years ago
When brand equity is measured using stock valuation with an estimate of the portion of the value allocated to brand equity and n
natka813 [3]

Answer:

The correct answer is letter "B": market value.

Explanation:

Market Value is the price of an asset that is traded or offered for sale in a public forum where multiple buyers are allowed to make offers to buy that asset. For marketable securities of publicly traded companies, the companies are required to issue periodic financial information to the public to meet a full-knowledge requirement.

7 0
3 years ago
Read 2 more answers
5. A garden plant that has been passed down within a food family and is generally not commercially grown is called a/an _______
madreJ [45]

Answer:

The correct option is D, Heirloom.

Explanation:

A garden Plant that has been passed down within a food family and is generally not commercially grown is called a Heirloom Product. Such garden plants are planted by the gardeners for their own and family use. Such plants are not sold commercially. Generally they are planted to be used within the house. Family members use such plants to make foods.

4 0
3 years ago
Three contractors (call them a, b, and
patriot [66]

Answer:  The probabilities of winning a contract are

P(A) = \frac{28}{36}  

P(B) = \frac{7}{36}  

P(C) = \frac{1}{36}


Let the Probability of C winning the contract - P(C) be 'X'

Then,

Probability of B winning the contract - P(B) will be '7X'     and

Probability of A winning the contract - P(A) will be \mathbf{P(A) = 4 * P(B) = 4*7X = 28X}

Since the total of all the probabilities is 1,

\mathbf{P(A) + P(B) + P(C) =1}

\mathbf{28X + 7X + X =1}

\mathbf{36X =1}

\mathbf{X =\frac{1}{36}}

So,

P(A) = \frac{28}{36}

P(B) = \frac{7}{36}

P(C) = \frac{1}{36}

4 0
3 years ago
Other questions:
  • ppleton Co., based in the United States, has costs from orders of foreign material that are lower than its foreign revenue. All
    13·1 answer
  • What type of theory is the expectancy theory
    6·1 answer
  • When Walmart threatens to punish or punishes the other channel member for not undertaking certain tasks, such as if it were to d
    9·1 answer
  • The balance sheet reports revenues and selling costs for a period of time.
    5·1 answer
  • The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2019.
    12·1 answer
  • On January​ 1, 2018​, Alaska Freight Airlines purchased a used airplane for $ 44 comma 000 comma 000. Alaska Freight Airlines ex
    13·1 answer
  • Rabah has just been hired as manager of a health spa. The owner has commissioned a market study that estimates the per person (a
    5·1 answer
  • A company with current-year sales of $4,500,000 and cost of goods sold of $3,248,000 reduced its inventory days from 119 days in
    12·1 answer
  • ABC Company's return on asset is greater than XYZ Company's return on asset, but XYZ
    10·1 answer
  • Which statement best summarizes the information on these graphs? many bolivians are farmers, but the agriculture sector does not
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!