What is the actual percentage change in the bond price

Assignment Help Financial Management
Reference no: EM131068615

Consider a 6% coupon bond making annual paymen tsif it has 3 years until maturity and has a yield to maturity of 8%. (show work)

a) What is the duration of this bond?

b) If the market yield increases by 80 basis points, what is the actual percentage change in the bond’s price?

Reference no: EM131068615

Questions Cloud

What are the cost and schedule variances for the project : A project in its 26th week has an actual cost of $270,000. It was scheduled to have spent $261,000. For the work performed to date, the budgeted value is $272,000. What are the cost and schedule variances for the project? What are the SPI and CPI?
What must be the risk-free interest rate : You buy a share of stock, write a one-year call option with X = $20, and buy a one-year put option with X = $20. Your net outlay to establish the entire portfolio is $18.60. What must be the risk-free interest rate?
Write a one-year call option-risk-free rate : You buy a share of stock, write a one-year call option with X = $20, and buy a one-year put option with X = $20. Your net outlay to establish the entire portfolio is $18.60. What must be the risk-free interest rate? The stock pays no dividends.
Multiplier effect from the inclusion of investment : What is the equilibrium real GDP without investment? What is the multiplier effect from the inclusion of investment? What is the average propensity to consume at equilibrium real GDP?
What is the actual percentage change in the bond price : Consider a 6% coupon bond making annual payments if it has 3 years until maturity and has a yield to maturity of 8%. (show work) What is the duration of this bond? If the market yield increases by 80 basis points, what is the actual percentage change..
What is cost of equity capital : Crosby Industries has a debt-equity ratio of 1.5. Its WACC is 11 percent, and its cost of debt is 8 percent. There is no corporate tax. Requirement 1: What is Crosby’s cost of equity capital?
What is the dividend yield-using the constant growth model : Company B just paid an annual dividend of $.42 a share. The stock is selling for $18 a share and has a growth rate of 2.2 percent. What is the dividend yield, using the constant growth model?
What is the anticipated sample size : What is the anticipated sample size: How many will be included? How will you determine this number?
What is the average monthly return : The past five monthly returns for PG Company are 3.25 percent, -.25 percent, 4.65 percent, 6.79 percent, and 4.34 percent. What is the average monthly return?

Reviews

Write a Review

Financial Management Questions & Answers

  What is your constant dollar mortgage payment on the day

You plan to live in your house for 20 years, and your 20 year mortgage (principle and interest only) is $2,100/month. If you expect inflation to average 3% annually, what is your constant dollar mortgage payment on the day of your last payment? Curre..

  How big will the balloon payment be

You have just arranged for a $1,760,000 mortgage to finance the purchase of a large tract of land. The mortgage has an APR of 7.6 percent, and it calls for monthly payments over the next 25 years. However, the loan has an eight-year balloon payment, ..

  Examine the butterfly spread created with the options

Three put options on a stock have the same expiration date and strike prices of $55, $60, and $65. The option prices are $3, $8, and $12, respectively. How should an arbitrager take advantage of the arbitrage opportunity if it exists? (Hint: Examine ..

  Define the term capital intensity

Define the term "capital intensity." Assuming all other elements are held constant, how would a decline in the capital intensity of a firm affect additional funds needed (AFN)? Would economies of scale combined with rapid growth affect capital intens..

  About the net cash conversion cycle

Some analysts consider a current (or working capital) ratio of less than one to be a positive sign of liquidity, despite conventionally indicating illiquidity. Discuss why some hold this position considering what you know about the net cash conversio..

  Discuss which mitigation strategies

Analyze all of the risks and mitigation strategies discussed this week in a brief summary, and discuss which mitigation strategies are not appropriate based on your informed judgment, and offer alternative mitigation strategies.

  Manage copper price risk-effective annual interest rate

ABC Corp. mines copper, with ?xed costs of $0.60/lb and variable cost of $0.30/lb. The 1-year forward price of copper is $1.10/lb. The 1-year effective annual interest rate is 6.2%. If ABC Corp. does nothing to manage copper price risk, what is its p..

  Assume that returns from asset are normally distributed

Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 14.8 percent and the standard deviation of those returns in this period was 43.71 percent. What is the approximate pro..

  Fundamental factors of your selected bank

Examine the fundamental factors of your selected bank. On the basis of this fundamental analysis and other methods of share valuation, determine if your selected bank is overvalued or undervalued.

  What is the net present value of the investment

An investment that requires $1,000 initial investment will return $600 at the end of first year and $650 at the end of second year. Assume the discount rate is continuously compounded at 8%. What is the Net Present Value of the investment?

  Hsieh-hseih inc must choose between two copiers the zz20

1. hsieh-hseih inc. must choose between two copiers the zz20 or the gg50.the zz20 costs 300 and will last for three

  What is the initial cost of the project

Projected operating costs (other than depreciation) are 73% of sales for the new beverages. However, Coca-cola estimates that projected sales for other carbonated beverages will fall $5 million in 2016, $9 million in 2017, $7 million in 2018, and $4 ..

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