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Amanda [17]
2 years ago
10

There is a bond with a coupon of 7.6 percent, seven years to maturity, and a current price of $1,032.20. What is the dollar valu

e of an 01 for the bond? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Dollar value of an 01
Business
1 answer:
Radda [10]2 years ago
3 0

Answer:

The dollar value of an 01 is:

$78.4472

Explanation:

a) Data and Calculations:

Bond coupon = 7.6%

Current price = $1,032.20

The yield to maturity value = $1,032.20 * 1.076 = $1,110.6472

Dollar value of an 01  = $1,110.6472 - $1,032.20 = $78.4472

b) In calculating the dollar value of the bond, which is a measure of the change in the value of the bond portfolio for every 100 basis point change in the interest rates, this is referred to as DV01 (that is, dollar value per 01).  Often denoted as 100 basis points (bps), 0.01 is equivalent to 1 percent.

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Answer:

1. Under what condition(s) can an economy make a relatively quick and easy transition to full-employment level of output?

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When a demand shock occurs, and the aggregate demand curve shifts to the right, the aggregate supply curve will also shift. At this point, suppliers will need to hire more employees and fast since they cannot keep up with the demand. The problem is that in real life, demand shocks are sudden only in theory, no one will wake up tomorrow having twice the money and willing to spend it all immediately.

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8 0
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An example of a discretionary item in the federal budget is
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Answer: See explanation below for answer.

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