Simple bond pricing and duration problem

Assignment Help Financial Management

Reference no: EM131860405

The purpose of the next question is to have you work a simple bond pricing and duration problem without using Excel’s formulas or the fancy formulas in the textbook. Work the following problem term by term. Calculate each term in the basic formulas, then add them to come up with the price or duration.

Suppose you have a 5% coupon bond with a ytm of 3 percent and a term-to-maturity of 3 years. The bond pays its coupon ANNUALLY (once per year) and has a face value of $1,000. What is this bond’s price? What is it duration.

Reference no: EM131860405

Questions Cloud

The event of company becoming bankrupt : Because shareholders are the last to receive any distribution of assets in the event of a company becoming bankrupt,

Present your persuasive essay to a target audience : Present your persuasive essay to a target audience. In this assignment, you will be taking the key points from your persuasive essay and integrating them.

Probability of getting heads when tossing any coin : If you toss a coin 20 times and it comes up heads 12 times, does this mean that the probability of getting heads when tossing any coin

Describe given events in the workshop in your own words : The events in the 2 day workshop and materials used MUST be described in your own words. The workshops CANNOT be a copy of a published layout from any hard copy

Simple bond pricing and duration problem : you work a simple bond pricing and duration problem. Calculate each term in the basic formulas, then add them to come up with the price or duration.

Determining the alternative hypothesis : Conduct a hypothesis test to see if the population average is different. Use an alpha level of 0.05. What's your alternative hypothesis?

Develop a linear model : Assume that you want to develop a linear model to predict the "Resale Value" of a car based on its "Price".

Explain hsa hra and fsa with examples : Explain HSA, HRA, and FSA with examples. Explain the types of incentives to providers for efficiency in the delivery of healthcare services.

What rhetorical writing strategies have you learned : In what ways might knowledge of argumentative or persuasive writing be important to your future courses and career?

User Account

All Pages