What is the duration and modified duration

Assignment Help Finance Basics

Reference no: EM131797556

Question: Use the table below for the questions that follow.

Bond	Coupon Rate	Yield	Maturity	Duration	Modified Duration
A	5.5%	3.86%	3 Year	?	?
B	Zero Coupon	5.25%	7 Year	?	?

A) What is the Duration and Modified Duration for both Bond A and B?

B) Compute the duration and modified duration of each bond, assuming semi-annual interest payments for the coupon bond.

C) What is the modified duration predicted price change for each bond for a 1% decrease in rates?

Reference no: EM131797556

Questions Cloud

What is the inventory turnover rate : At the beginning of the year, your inventory was $31,000. At the end of the year, the inventory balance was $33,000. What is the inventory turnover rate

Define the role of logistics in supply chain management : Define the role of logistics in supply chain management. Be sure to identify the activites of Integrated Logistics Management.

How much must tighe include in his gross income : In addition, Tighe's employer gave him $5,000 with which to pay the taxes on the prize. How much must Tighe include in his gross income

Prepare a revised balance sheet given available information : Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $168,000.

What is the duration and modified duration : Compute the duration and modified duration of each bond, assuming semi-annual interest payments for the coupon bond.

Difference between a stock dividend and stock split : What is the difference between a stock dividend and stock split? Please explain.

How much of the sherry include in income : Sherry just received her $15,000 payment for 2011. How much of the $15,000 must Sherry include in income

Equity accounts remain in existence indefinitely : Do these equity accounts remain in existence indefinitely, since they do not seem to be related to the equity accounts recognised by Cancer Ltd itself?

Determine the corrected amounts for cost of goods sold : Determine the corrected amounts for 2017 cost of goods sold and December 31

User Account

All Pages