1 consider a bond with a 1000 par value five years to, Ask an Expert

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1. Consider a bond with a $1,000 par value, five years to maturity, with a 6% annual coupon. The yield to maturity is 8% and the bond is selling for $920.15. What is the duration of the bond?

2. A bond has a YTM of 8%, a modified duration of 12 years, a duration of 22 years and a 30 year maturity. By what percentage will the bond’s price change if market interest rates increase by 0.5%?

3. You plan to invest $20,000 now and hope to earn 10% a year for the next 10 years. If your expectations are met, how much will your investment be worth in 10 years?

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Financial Management, Finance

Category:- Financial Management
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