User Account

All Pages

What is the duration of this bond

Assignment Help Financial Management
Reference no: EM13730405

A bond currently sells for $1,050, which gives it a yield to maturity of 6%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,025. What is the duration of this bond?

Reference no: EM13730405

Questions Cloud

Briefly explain the ideas behind technical analysis : Briefly explain the ideas behind technical analysis.  In your opinion, does technical analysis have any validity in the investment world?
Number represent with respect to the firms shareholders : Why is NPV considered a superior method of evaluating the cash flows from a project? Suppose the NPV for a project’s cash flows is computed to be $3,000. What does this number represent with respect to the firm’s shareholders? Describe how the IRR is..
Year-end the yield curve will be flat : One-year bonds yield 7%, two-year bonds yield 8%, three-year bonds and greater maturity bonds all yield 9%. You are choosing between one-, two-, and three-year maturity bonds all paying annual coupons of 8%, once a year. Which bond should you buy if ..
Issue a three-year treasury note to raise : The US Treasury decides to issue a three-year treasury note to raise $16 billion. If the following bids were received, calculate the offer price (to 4 decimal places) of the US T-note per $100 face value.
What is the duration of this bond : A bond currently sells for $1,050, which gives it a yield to maturity of 6%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,025. What is the duration of this bond?
Calculate the price and the duration of the bond : A 4-year bond, that has a face value of $100 and pays a coupon of 5% annually, is selling at a yield-to-maturity of 6%. Calculate the price and the duration of the bond.
How much its current market value would be : A bank offers a three-month, $100,000 negotiable CD, which will pay a 4.4% annual interest rate. Assume that the market rate on the CD rose to 5% immediately after you purchased the CD, how much its current market value would be.
Calculate its discount yield and its bond equivalent yield : A US T-bill, with a face value of $100 and maturing in 60 days, can be purchased for $99.40. Calculate its discount yield and its bond equivalent yield.
Computer-based order entry system : Your firm is contemplating the purchase of a new $620,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $68,000 at the end of that time.

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare a wac io and po tranche

Prepare a WAC IO and PO tranche to give a 5.75% deal coupon. Create a PAC class (A-1) with an initial collar of 50%-200% PPC, assuming base case defaults.

  International finance problem

International Finance Problem

  What is the after-tax cost to shareholders

In 2012, an employee was granted 305 options on the stock of a firm with an exercise price of $20 per option. In 2013, after the options had vested and when the stock was trading at $35 per share, she exercised the option. The firm's income tax rate ..

  Most of the worldrsquos population lives outside the united

1.most of the worldrsquos population lives outside the united states. however many u.s. companies especially small

  Local Option Income Tax

We expect to receive $6.75 million this year from our Local Option Income Tax (LOIT). The state collects the tax and sends equal payments to us at the end of each quarter. Assume we use a normal calendar year for accounting purposes. How much money w..

  Compute the net present value

Calculate the Net Present Value (NPV), the Modified Internal Rate of Return (MIRR), the Profitability Index and the Discounted Payback for this project. Should the project be accepted? Why or why not?

  Design of a cash concentration system

Design of a Cash Concentration System by Stone and Hill - Comment on the major issues involved in the structuring and implementation of an efficient cash collection system.

  Find the total payment

On September 1, 2009, Susan Chao bought a motorcycle for $26,000. She paid $1,200 down and financed the balance with a five-year loan at a stated annual interest rate of 6.8 percent, compounded monthly. She started the monthly payments exactly one mo..

  What is the internal rate of return

What is the internal rate of return for the following project: an initial outlay of $10,500 resulting in a single cash inflow of $20,462 in 7 years?

  Current debt-equity ratio-risk level of project

Kelly's uses the firm's WACC as the required return for some of its projects. For other projects, the firms uses a rate equal to WACC plus 1 percent, while another set of projects is assigned rates equal to WACC minus some amount. Which one of the fo..

  Considered in the fixed charge coverage ratio

Which of the following would not be considered in the fixed charge coverage ratio?

  What is valences share price

Valence Electronics has 217 million shares outstanding. It expects earnings at the end of the year of $760 million. Valence pays out 40% of its earnings in total. 15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are ..

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: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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