1) A bond has the 7.5% annual coupon rate with 4 years to maturity and pays annual coupon
i) What is the price of the bond if the yield to maturity is 5%
ii) What is price of the bond if the yield to maturity increases by 0.2%?
iii) What is the % change in the price of the bond when yield increases by 0.2%?
iv) What is the bond duration?
v) What is the modified duration?
vi) Using the modified duration, what is the percentage change in the price if the yield increases by 0.2%
vii) What can you conclude regarding the error estimate based on the modified duration?
Min Pages: 1
Be nice to have the steps on how to use it on a Texas Instrument BA II Plus
2) The First Bank of Ellicott City has issued continuous preferred stock with $100 par value. Bank pays the quarterly dividend of $1.65 on this stock. Determine the present price of this preferred stock given the necessary rate of return of 14.5 percent?