What is the modified duration

Assignment Help Finance Basics
Reference no: EM13511573

Please help me out with these questions:
1. What is the Macaulay duration of a 5.4 percent coupon bond with nine years to maturity and a current price of $1,055.40? What is the modified duration?
2. 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
b. Calculate the new bond price
3. There is a 6.8 percent coupon bond with eight years to maturity and a current price of $1,071.30. What is the dollar value of an 01 for the bond?
4. A Treasury bond with 6 years to maturity is currently quoted at 110:14. The bond has a coupon rate of 11.1 percent. What is the yield value of a 32nd for this bond?

Reference no: EM13511573

Questions Cloud

Explain mg2+ and mn2+ ions is buffered to ph : A solution which is 0.010 M in both Mg2+ and Mn2+ ions is buffered to pH 9.30 using an aqueous ammonia-ammonium chloride solution. Under these conditions, only one metal hydroxide precipitates.
Differences in the public reception of veterans : Describe the differences in the public reception of veterans returning from the Vietnam and Iraq wars. What were the reasons behind the difference in the treatment of these two groups of veterans?
Calculate how much charge does that capacitor store : A capacitor with its plates separated by paper stores 4.6 nC of charge when it is connected to a particular battery. How much charge does that capacitor store
Determine the maturity date : On August 25, Champion Company received a 90-day, 9 percent note in settlement of an account receivable in the amount of $20,000. Determine the maturity date, amount of interest on the note, and maturity value.
What is the modified duration : 1. What is the Macaulay duration of a 5.4 percent coupon bond with nine years to maturity and a current price of $1,055.40? What is the modified duration?
Find the amount of heat generated when the ball hits floor : A 450g rubber ball is dropped from 2.0m above the floor. After the bounce, the ball only rises to a height of 1.5m above the floor. find the amount of heat generated when the ball hits the floor
Explain how many moles of element are in the sample : A compound is 80.0% carbon and 20.0% hydrogen by mass. assume a 100 gram sample of this compound. How many moles of each element are in this sample
Prepare the entries that would be recorded by oakbrook inc : Prepare the entries that would be recorded by Oakbrook Inc. for the sale and for the receipts and interest on the following dates. (Assume that the effective-interest method is used for amortization purposes.)
What are examples of research methods : Why is microcredit so important and why? Why does the Grameen Bank focus primarily on women as lendees? What are the reasons kindness has diminished in the twenthieth century?

Reviews

Write a Review

Finance Basics Questions & Answers

  Computation of selection of the project

Computation of selection of the project and evaluating two mutually exclusive projects and Costs and cash flows are given in the following table

  Compute the stock current price

Crumpley Corporation has $5 M is current assets, zero debt, in 40% tax bracket, net income of $1 M. NI is expected to grow at a constant rate of 5percent per year. 200,000 shares outstanding and current WACC of 13.40 percent.

  Calculate lowest return

If you require a real growth in purchasing of your investment of 8 percent and you expect the rate of inflation over the next year to be 3 percent,

  If two firms have the same current dividend and the same

if two firms have the same current dividend and the same expected growth rate their stocks must sell at the same

  Find the percentage increase in firm earnings

A corporation has yearly sales of $14,000. Its variable costs equal 60% of its sales, fixed costs equal $1,000. If the company's sales increase 10 percent,

  Why is it important to understand the ability to evaluate

why is it important to understand the ability to evaluate investments in fixed assets when analyzing an organizations

  Calculate the current yield for each bond

Calculate the current yield for each bond. d. If the yield to maturity for each bond remains at 9%, what will be the price of each bond 1 year from now?

  How long on average does it take to collect payment

West Coast Sports has total sales of $318,000, cost of goods sold of $241,000, and an average receivables balance of $38,200. How long on average does it take to collect payment from a customer?

  Find rate of return on the investment

The stock of Michelle Travel company is selling for 43.00 a share. You put in a limit buy order at 44 for one month. During the month, stock price declines to a low of 38.00,

  What is capital rationing

what is capital rationing and how does it affect your cost of capital and your capital budgeting decisions?

  Computing the current price of the stock

CPX Corporation just paid a dividend of $1 each share. Analysts expect the company's dividend to increase 10 percent this year and 8 percent the next year.

  Determine the break even point in dollars and in units

The Corporation makes rubber stamps which sells for $400 each; their fixed costs are $75,000 and variable expenses are $250 per rubber stamp.

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