User Account

All Pages

Calculate duration of bond

Assignment Help Business Economics
Reference no: EM133269162

1. A bond with $1,000 face value, 10% coupon, market interest rates of %7, and 10 years to maturity.

a. Calculate the duration of the bond. Show calculation.

b. Assume that market interest rates increased to 12%, re-calculate the duration of the bond

c. Comment generally on the relationships between the interest rates, coupons, and duration

2. A. Calculate the one-year return on a 10% 2-year bond with 7% interest rates and interest rates are expected to rise to 10%. Face value is 1,000. Show your calculation.

b. Calculate the one-year return on a 10% 3-year bond with 7% interest rates and interest rates are expected to rise to 10%. Face value is 1,000. Show your calculation.

c. Comment generally on the return of the two bonds.

Reference no: EM133269162

Questions Cloud

Calculate net social benefits of the project : Which group is a "winner" from this project? Which group is a "loser" from this project? Calculate the net social benefits of the project.
Methods of data collection to include uniform crime report : After reviewing the following methods of data collection to include the Uniform Crime Reports survey research National Crime Victimization Survey NCVS.
Discriminating monopsonist-non-discriminating monopsonist : Describe the hiring decision of a perfectly discriminating monopsonist and of a non-discriminating monopsonist.
Sam criminal liability in relation to her off-field conduct : Consider both Sam's criminal liability in relation to her off-field conduct and Steph's criminal liability with respect to her on-field conduct.
Calculate duration of bond : Calculate the duration of the bond. Comment generally on the relationships between the interest rates, coupons, and duration
Build parks in new developments : Consider the race to become mayor of your city. One of the candidates is proposing to build parks in new developments throughout the city
Discuss how family dysfunction contributes to crime : Discuss how family dysfunction contributes to crime. What other factors contribute to crime?
Elasticity apply to consumers and producers : How does the concept of the topic of elasticity apply to consumers and producers
What is randomized pricing and commodity bundling : What is commodity bundling? What are cross-subsidies? What is randomized pricing?

Reviews

Write a Review

Business Economics Questions & Answers

  Determine the depreciation charge

Determine the depreciation charge during the 6th year by Sinking Fund Method assuming 10.5% compounded annually.

  What is the publisher profit maximizing price

The publisher of an online Economics Primer course is trying to sell the primer to a group of MBA students and a group of EMBA students in the US. The maximum willingness to pay for the primer in each group of students as well as the number of studen..

  Everyone attends the meeting and votes

The Political Science Department at kent state has n = 26 professors (or, players). They must decide on whether to hire a promising job candidate (alternative A

  Regional shopping mall-report micro and macro-economic facts

Picture a big shopping mall, but vacant, a property (Super Regional shopping mall) of 154,000 square feet has a market value of $ 14,000,000.00 ($90.58/sf). the property is located in Riverside in the state of California. But it is not so simple, thr..

  Specialty crane used in construction was purchased

A specialty crane used in construction was purchased for $350,000 5 years ago. It is MACRS-GDS 7-year property. Its annual O&M costs are $45,000 increasing by 5%. The remaining useful life is 6-years and the end of the 6-year planning horizon, the mi..

  How many german phones can be traded for one u.s.

Suppose a comparable phone costs 500 USD in the U.S. and 300 EUR in Germany. If the nominal exchange rate is 0.8 EUR per 1 USD, then the real exchange rate in terms of how many German phones can be traded for one U.S. phone is

  Shock on the equilibrium price and quantity

For each of the following scenarios, use a supply and demand diagram to illustrate the effect of the given shock on the equilibrium price and quantity.

  Discuss differences between relative and absolute poverty

Discuss the differences between relative and absolute poverty. Reference specifically how we can measure these two kinds of poverty.

  The inflation rate is estimated

The cost of garbage pickup in Green Gulch is $4500000 for Year 1. Estimate the cost in Year 3 in Year-1 dollars and in nominal dollars. The population is increasing at 6%, the nominal cost per ton is increasing at 5%, and the inflation rate is estima..

  Increased government spending to fight recessions

Select two subjects from the following list of topics and write a 1,050-word analysis:

  Labor force participation rate and unemployment rate

What is the labor force participation rate and unemployment rate (by sex) for the city of Los Angeles for the years 1990, 2000, 2010, and 2020?

  Calculate the deadweight loss associated with externality

Suppose that demand for a product is Q=140-6P and supply is Q=2P-20. Furthermore, suppose that the marginal external damage of consuming this product is $4 per unit. Does it result in under consumption? Or over consumption? How many more or less unit..

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