How does a firm protect itself from inflation

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1. A bond with a maturity of 30 years has a coupon rate of 8% (paid annually) and a yield to maturity of 9%. Its price is $897.26 and its duration is 11.37 years. What will happen to the bond price if the bond’s yield to maturity increases to 9.1%?

2. How does a firm protect itself from inflation

3. Derivative instruments acquired to hedge exposure may be classified as either a fair value hedge or a cash flow hedge. Distinguish between the two types of hedges.

Reference no: EM131917963

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