Problemyou have discovered that when the required rate of, Ask an Expert

Finance

Problem:

You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 8.3 percent to 7.8 percent, the fair present value rose from $955 to $975.

Required:

What is the duration of this bond? Assume annual payments. Explain in detail.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91145990

Have any Question?Write your Review or question?

Related Questions in Basic Finance

What is the difference between systematic versus

What is the difference between systematic versus unsystematic risk?

Assume that the expected rates of inflation over the next 5

Assume that the expected rates of inflation over the next 5 years are 4 percent, 7 percent, 10 percent, 8 percent, and 6 percent, respectively. What is the average expected inflation rate over this 5-year period? 6% 9% 8 ...

Tapley dental supply company has the following datanet

Tapley Dental Supply Company has the following data: Net Income = $240 Sales = $10,000 Total assets = $6,000 Debt ratio = 75% TIE ratio = 2.0 Current ratio = 1.2 BEP ratio = 13.33% If Tapley could streamline operations, ...

Question - bridgestone a japanese-based company receives

Question - Bridgestone, a Japanese-based company, receives recurring income in USD of about USD 5 billion per year. The current exchange rate is ¥120/USD. The annualized exchange rate volatility is 10%. The interest rate ...

What factors are involved in cash flow management as they

What factors are involved in cash flow management as they relate to various payment methods and What kinds of payment terms might the business venture have with its vendor to help manage its cash flow?

Exerciseto hedge a short share position one can short the

Exercise To hedge a short share position, one can short the put option on the share. • What is the investor's intention in selling the put option? • What does the strike indicate when the trader has zero risk tolerance? ...

We just signed a lease contract in a 200000 sf office

We just signed a lease contract in a 200,000 SF office building complex for $25/SF/year with rents paid in arrears (at the end of the year) annually. The rent will increase by 3% per year. The discount rate is 10%/year. ...

In capital budgeting for a multinational company the

In capital budgeting for a multinational company, the starting discount rate to which risks stemming from foreign exchange and political factors can be added, and from which benefits reflecting the parent's lower capital ...

Your firm needs a machine which costs 190000 and requires

Your firm needs a machine which costs $190,000, and requires $40,000 in maintenance for each year of its 7 year life. After 5 years, this machine will be replaced. The machine falls into the MACRS 7-year class life categ ...

What factors would influence the decision to sell a

What factors would influence the decision to sell a component of the business to raise capital to facilitate growth of another component of the business?

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert