What is the modified duration

Assignment Help Financial Management
Reference no: EM131068693

What is the Macaulay duration of a 6.2 percent coupon bond with five years to maturity and a current price of $1,064.70? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.) Duration Macaulay Years Modified Years

Reference no: EM131068693

Questions Cloud

How many exercise machines should the university buy : How many exercise machines should the university buy? (Show how you get your answer.) The University would like to collect payments from individuals in order to buy the socially optimal number of exercise machines (from part a)). Describe the Lind..
Use duration to estimate the new price of the bond : Consider a 8.4 percent coupon bond with eleven years to maturity and a current price of $1,041.40. Suppose the yield on the bond suddenly increases by 2 percent. a. Use duration to estimate the new price of the bond. Calculate the new bond price.
Explain why the type of graph you have selected is the best : You should only explain why the type of graph you have selected is the best for your example. APA requirements, one scholarly article at least. At four three paragraphs.
Statue of elvis : There are three individuals in a community that is deciding whether to unveil a statue of Elvis. Individual 1 would receive a net benefit of 25 if the statue were unveiled. Individual 2's netbenefit would also be positive and would be 20.
What is the modified duration : What is the Macaulay duration of a 6.2 percent coupon bond with five years to maturity and a current price of $1,064.70? What is the modified duration?
Predict the future of venture capital investment activity : Discuss the results of investing based on the stage of growth - Analyze the trends that you believe influenced the investing and the results.
Maximum and minimum difference between the wage rate : If both countries trade with each other, what is the maximum and minimum difference between the wage rate in Indonesia and the USA?
Percentage price change of bonds : Bond J is a 7 percent coupon bond. Bond K is a 11 percent coupon bond. Both bonds have 12 years to maturity and have a YTM of 8 percent. a. If interest rates suddenly rise by 1.6 percent, what is the percentage price change of these bonds? Bond J % B..
Describe what your recommended salary and benefits package : Describe what your recommended salary and benefits package is going to be and if you recommend any incentives or bonus plans. Finish your report by stating if this job is eligible to be in the union. Explain why or why not.

Reviews

Write a Review

Financial Management Questions & Answers

  What is its pretax cost of debt

Blue Bull, Inc., has a target debt-equity ratio of .85. Its WACC is 8.4 percent, and the tax rate is 35 percent. Required: (a) If the company’s cost of equity is 12.5 percent, what is its pretax cost of debt?

  What nominal annual rate will they charge their customers

Bank 1 lends funds at a nominal rate of 9% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal annual rate will they charge their ..

  What is the present value of this investment

An investment will pay $1283 two years from now, $ 3848 four years from now and $3124 five years from now. If the opportunity rate is 19.57 percent per year, what is the present value of this investment?

  Sell stocks in an attempt to beat the market

What does the Efficient Market Hypothesis (EMH) imply for investors who buy and sell stocks in an attempt to beat the market?

  What conclusions can you reach about the sources

What conclusions can you reach about the sources of green power?

  What rate of return should investors expect on fund

Assume that you are the portfolio manager of the SF Fund, a $3 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 5.00%. What rate of return should investors expect (an..

  Describe the workings of any home buyer assistance schemes

Identify and describe the key factors that must be taken into consideration when assessing whether a credit facility is ‘not unsuitable' for a borrower.

  Decide to launch a venture likable lunches

Tony and Franzi, after graduating from the DMBA program, decide to launch a venture "Likable Lunches." To do this, Franzi would need to invest $1,000 at t=0 for the ingredients and menu development for these lunches. There's a 50-50 chance of strong ..

  Semiannual coupon payments

Harry Houdini Ltd issues a 10-year bond that pays a 4 percent coupon. The current market rate for similar bonds is 3 percent. Assume semiannual coupon payments. What is the maximum price that should be paid for this bond? (Round to the nearest dol..

  What is the pv of the investment

An investment offers 10,000 per year, with the first cash flow to be received today. If the relevant interest rate is 8% per year, what is the pv of the investment ( at year 0) ? should the answer be 135000? You can make 450 monthly payments for 5 yr..

  Determinants of interest rates

The real risk-free rate is 2%. Inflation is expected to be 3% this year, 5% next year, and then 6% thereafter. The maturity risk premium is estimated to be 0.0004 x (t - 1), where t = number of years to maturity. What is the nominal interest rate on ..

  Maximum price per share that newman should pay for grips

Newman manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just completed, Grips earned $3.84 per share and paid cash dividends of $2.14 per share (D0= $2.14). Grips' earnings and dividends are expected to grow at..

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