Calculate the new bond price

Reference no: EM13271471

Consider a 8.80 percent coupon bond with five years to maturity and a current price of $956.20. Suppose the yield on the bond suddenly increases by 2 percent.

1. Use duration to estimate the new price of the bond. (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

2. Calculate the new bond price.

Reference no: EM13271471

Questions Cloud

Find liabilities to assets ratio and debt to assets ratio : Assume you are given the following information: Sales/Total Assets = 1.5, ROA =2% abd ROE = 9%; calculate liabilities to assets ratio and debt to assets ratio.

Although the clitoris is the organ for sexual excitement : Although the clitoris is the organ for sexual excitement in the female and has the same tissue as the penis, most refer to the vagina as the sexual organ for female not the clitoris.

Find what is the corresponding spread bit stream : Consider a 4 channel CDM system with the following CHIPS: A: -1 -1 -1 1 B: -1 -1 1 -1 C: -1 1 -1 -1 D: -1 1 1 1 a) Show that each one of those chips is orthogonal to all of the others. b) If the CDM signal 1 -1 -3 1 is received, by all receivers, ..

Prepare absorption and contribution margin income statements : Prepare absorption and contribution margin income statements for the succeeding quarter for the division and compute production costs per unit for both approaches and for both quarters

Calculate the new bond price : Consider a 8.80 percent coupon bond with five years to maturity and a current price of $956.20. Suppose the yield on the bond suddenly increases by 2 percent.

Discuss in detail the chemistry of diels-alder reactions : Give a brief discussion of the chemistry of Diels-Alder reactions and why do ENDO products usually predominate

What is the modified duration : What is the Macaulay duration of a 8.6 percent coupon bond with twelve years to maturity and a current price of $953.90? What is the modified duration?

Determine what is the time allotted to each channel : A 32 channel TDM system samples messages at 8000 samples per second, uses 2 bits for frame synchronization and 8 bits per sample. What must be the highest frequency in the message spectrum to guarantee perfect recovery of the original signal

What is present value of entire underwriting compensation be : Assume that the investment banker's required return on such arrangements is 18%, and ignore taxes.

User Account

All Pages