User Account

All Pages

Bond that pays an annual coupon of 10 percent and trades

Assignment Help Macroeconomics
Reference no: EM13317548

Calculate the duration of a two-year, $1,000 bond that pays an annual coupon of 10 percent and trades at a yield of 14 percent. What is the expected change in the price of the bond if interest rates decline by 0.50 percent.

Reference no: EM13317548

Questions Cloud

What will happen to the realized return if interest rates : Consider the case in which an investor holds a bond for a period of time longer than the duration of the bond, that is, longer than the original investment horizon.
Show that a 9 percent yield also will be earned if interest : Show that if interest rates rise to 10 percent within the next year and your investment horizon is four years from today, you will still earn a 9 percent yield on your investment.
Calculate the numerical value of the leverett j- function : The medium contains a wetting phase in equal proportions. Calculate the numerical value of the Leverett J- function for this idealized porous medium. Assume the wall thickness of the capillary tube to be negligible small.
Determine the stretch of the cord at the angle of cord : The two disks each have a mass of 18 kg and are attached at their centers by an elastic cord that has a stiffness of k= 1.6 kN/m. Determine the stretch of the cord when the system is in equilibrium and the angle of the cord.
Bond that pays an annual coupon of 10 percent and trades : Calculate the duration of a two-year, $1,000 bond that pays an annual coupon of 10 percent and trades at a yield of 14 percent. What is the expected change in the price of the bond if interest rates decline by 0.50 percent
You have discovered that the price of a bond rose from : You have discovered that the price of a bond rose from $975 to $995 when the yield to maturity fell from 9.75 percent to 9.25 percent. What is the duration of the bond?
Determine the change in the entropy to be reversible process : Air mass of 4 kg of liquid water is cooled from 90c to 10c under a constant pressure. Determine the change in its entropy, assuming the process to be reversible.
How is duration related to the interest elasticity of a fix : How is duration related to the interest elasticity of a fixed-income security? What is the relationship between duration and the price of the fixed-income security?
What is the rotational kinetic energy of smaller cylinder : Two uniform solid cylinders, each rotating about its central (longitudinal) axis, have the same mass of 3.74 kg, What is the rotational kinetic energy of the smaller cylinder

Reviews

Write a Review

Macroeconomics Questions & Answers

  Illustrate what are the dividend payout ratios for each firm

Illustrate what are the dividend payout ratios for each firm. What are the expected dividend growth rates for each firm.

  How asymmetric information about a hidden action can lead

a. Explain how asymmetric information about a hidden action or a hidden characteristic can lead to moral hazard or adverse selection. b. Discuss a few tactics that managers can use to overcome these problems.

  Difficulties in unitization with oil or gas alone

Some of the fields have large enough quantities of both oil and natural gas that coordination must achieved for the production of both rather than oil alone.

  Optimum level of production and price level

Find out the optional number of units to put in a package. How much should the firm charge for this package?

  Formula to calculate the net benefits

Suppose the City of Klamath is considering plans to build a dam on the Klamath River. There are currently social benefits to the recreational fishermen who use the river to catch salmon.

  Which amount is larger- that spent by the govt

Suppose that thedemand curve for corn is downward-sloping but that the supply curveis perfectly price inelastic at a quantity of Q* once the corn isharvested. Furthermore, assume that the equilibrium price is $ 5per bushel.

  The cross-price-elasticity of demand for coffee and tea

If the income elasticity of a particular good is negative 0.2, it would be considered 1) a superior good 2) a normal good 3) an inferior good 4) an elastic good

  How to replace the manager of the roller division

Roller manufacturing is relatively simple, requiring only labor and a machine that cuts and crimps rollers. As you begin reviewing the company's production information, you learn that labor is paid $8 per hour and the last worker hired produced 10..

  If the table shows the demand faced by a monopoly

if the table shows the demand faced by a monopoly company then what is that firms marginal revenues as it increases output from 100 units to 300 units.

  Basis of the kinked demand model

Determine the basis of the kinked-demand model? Describe the reason for the gap in oligopolist's marginal-revenue curve. How does this model explain price rigidity in oligopoly.

  How do network effects contribute to economies of scale

What is the relationship between economies of scale and a natural monopoly? What is simultaneous consumption and how does it affect economies of scale? What are network effects and how do they contribute to economies of scale?

  Why do green laws undermine the idea of deflation

1) Why are Cost Minimization and Profit Maximization on paper the same but in application different 2) What are movie subsidies and why are they more inefficient than other government aided investment 3) Why do Green laws undermine the idea of deflat..

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