Calculate the duration

Assignment Help Finance Basics
Reference no: EM132183973

Question - A 3-year 5% coupon bond with annual payments (face value = 100) currently trades for 100.

Calculate the duration (in years).

Now suppose that yields go up to by 100 basis points. Calculate the approximate dollar change in the price of the bond using duration.

Will the actual dollar change be bigger or smaller than the dollar change you computed in part (b). Please only answer with the word BIGGER or SMALLER.

In ONE word, what is the reason for the difference?

Reference no: EM132183973

Why is a favorable irs ruling regarding the tax status

From a tax perspective, what primary requirements in a lease transaction must be met in order for the IRS to consider the transaction a genuine lease? Why is a favorable IRS r

Prepare a summarize paper about the given article

In an APA formatted (sixth edition) paper, please summarize the following article, which is an assigned reading in this unit (note: please cite and reference per APA standar

Whats the firms cash conversion cycle

What's the firm's cash conversion cycle and assume that all of the firm's sales are on credit. If the firm has annual sales of $4 million, what's the accounts receivable inv

Determine expected return on a portfolio

Security F has an expected return of 12% and a standard deviation of 9% per year. Security G has an expected return of 18% and a standard deviation of 25% per year.

How can the venture capitalists eventually capitalize

Venture capital is a form of private equity in which capital is raised in private markets as opposed to the public markets. How can the venture capitalists eventually capita

Yield on zero-coupon bonds

A young investment banker considers issuing a bond for ¥100 million. The interest or coupon is paid on year 1 and year 2. What should the interest paid in yen be? What about

What is pdq tax liability

PDQ Corp. has sales of $4,000,000; the firm's cost of goods sold is $2,500,000; and its total operating expenses are $600,000. The firm's interest expense is $250,000, and t

What is the effective annual rate on the loan

Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $320.00 at the end of each quarter and then pay off t

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd