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stira [4]
2 years ago
10

A bond has a Duration (not Modified) of 4.2 years and is priced at 99.50. Its yield is 3%. How much will its price change if the

yield increases to 3.3%? Use this data for the next 2 questions also.
Business
1 answer:
saw5 [17]2 years ago
4 0

Answer:

1.22%

Explanation:

The modified duration of the bond gives an indication of change in price due to a 1% change in the yield to maturity,hence, the bond modified duration is computed using the formula below:

modified duration=Macaulay Duration/(1+YTM)

Macaulay Duration=4.2

YTM(initial)=3%

modified duration=4.2/(1+3%)= 4.08  

That for 1% change in yield to maturity price would change 4.08%

0.3% change in yield(3.3%-3%)= 4.08%*0.3%=1.22%

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Answer:

Regarding to Claim to income, the correct answer would be C-Bottom

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All are examples of independent regulatory agencies except:
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