1 a pair bond with a nominal value of 1000 to 9 years has, Ask an Expert

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1. A pair bond with a nominal value of $ 1000 to 9 years has YTM of 10.5% and a duration of 7,356 years. If the market rate goes up by 40 bp,

a. What would be the change in the price in percentage terms?

b. What would be the new price of the bond if the duration were an exact predictor?

c. Would you expect the change to be the same if the rate goes down 40 bp? Yes or no and what to expect.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92846471

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