User Account

All Pages

Calculate the bond macaulay and modified duration

Assignment Help Financial Management
Reference no: EM132951909

On July 1st 2021, John buys a bond that was issued on January 1st and will mature on December 31st 2025. Annual coupon rate is 8%. Annual interest payments are made on December 31st each year from 2021 to 2025 and principle payment on December 31st 2025. On July 1st 2021, the bond is quoted on the market at the clean price of 99.

a) Calculate the bond's Macaulay and Modified Duration on July 1st 2021.

b) On December 31st 2021, John receives the first interest payment and deposit it into a 1-year saving account with a 6% interest rate. After receiving the interest payment on December 31st 2022, John decides to sell the bond, and withdraw his saving in the bank to pay for his MBA in the US. On December 31st 2022, the bond's yield to maturity is 7%. Calculate John's bond return.

Reference no: EM132951909

Questions Cloud

Determine the expected annual cost of financing : The spot rate of the Singapore dollar is £0.5. Determine the expected annual cost of financing with the Singapore dollar-denominated bond (in pounds)
Types of leveraged trading in the vietnam stock market : Describe basic features of the 3 types of leveraged trading in the Vietnam stock market, namely margin trading, future contracts and covered warrants.
Determine the outcomes of hedging strategy : (a) Construct an appropriate hedging strategy to accommodate your objective. (4 marks) (b) Suppose you terminate the hedge early in the coming December.
Prepare an amortization schedule for the ?rst ?ve payment : Prepare an amortization schedule for the ?rst ?ve payment periods using the format shown below. Round all amounts to the nearest whole dollar
Calculate the bond macaulay and modified duration : On July 1st 2021, John buys a bond that was issued on January 1st and will mature on December 31st 2025. Annual coupon rate is 8%.
What was the flexible budget variance for fixed costs : It turned out that 11,900 units were produced in 2020, total variable costs were actually $118,524, What was the flexible budget variance for fixed costs
What is the bank expected default frequency : What is the bank's expected default frequency on its portfolio before any new product is added?
Make a schedule of cash receipts and payments for the period : The balance of his bank loan at December 31, 2032 is P200,000. Make a schedule of cash receipts and payments for the period
Define cost-shifting : Define "cost-shifting." What is the empirical evidence that this practice exists or not? How does this behavior contribute to broader information asymmetries in

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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