Consider a 6 2 bond which matures in 3 years the face, Ask an Expert

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Consider a 6 % (2) bond which matures in 3 years. The face value is $100. The annual yield is 8%

Required:

Question 1: Draw the cash-flow chart of the bond

Question 2: Using the definition, find the duration of the bond

Question 3: Using price sensitivity formula, find the approximate price when the yield changes to 9% and 7%, respectively

Question 4: Is there any difference in change of price? Justify your answer

Note: Please provide through step by step calculations.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166521

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