User Account

All Pages

Define the concept of duration

Assignment Help Finance Basics
Reference no: EM132801748

(a) Define the concept of duration. What is its economic meaning? How does it differ from maturity?

(b) Calculate the duration of a two-year corporate bond paying 6 percent interest annually, selling at par. Principal of $20,000,000 is due at the end of two years.

(c) A $1,000 six-year Eurobond has an 8 percent coupon, is selling at par, and contracts to make annual payments of interest. The duration of this bond is 4.99 years. What will be the new price using the duration model if interest rates increase to 8.5 percent?

Subproblems (b) please explain specific steps, how the number of the step by step by step

Reference no: EM132801748

Questions Cloud

How do you engage your students in social studies lessons : How do you engage your students in social studies lessons? What examples do you have of incorporating the arts into social studies lessons?
What is Swifty Company residual income : Swifty Company recorded the following operating data: Total operating assets Dec. 31, 2020: 789000. What is Swifty Company residual income
Why institutions have goals related to diversity in place : In an initial post, summarize a recent case or decision, and provide an assessment of why institutions have goals related to diversity in place.
Shares of the law firm according to the capm : a. If the interest rate on Treasury bills is 5% and the expected return on the market portfolio is 20%, what is the expected return on the shares of the law fir
Define the concept of duration : (a) Define the concept of duration. What is its economic meaning? How does it differ from maturity?
MKT 2288 Marketing Management Assignment : MKT 2288 Marketing Management Assignment Help and Solution, Lethbridge College - Assessment Writing Service - Analyze our competitive landscape
Managing interest rate and currency exposure : XYZ Company is a public company and is a leading global producer, designer and supplier of engineered aerospace components, systems and subsystems. The company
Calculate the cash flow from inventing activities : Calculate the cash flow from operating, financing and inventing activities, and the net change in cash for Orange Corporation based on data: Net Loss ($54,000)
Explain the different questioning strategies : In 250-500 words, summarize and reflect on how asking a variety of questions and using different questioning strategies can help students develop higher-order.

Reviews

Write a Review

Finance Basics Questions & Answers

  Monitoring or development of a strategic plan

In regards to business, What role should the employee play in the monitoring or development of a strategic plan?

  Develop the march budget allowances for each cost center

(a) Develop the March budget allowances for each cost center. (b) Develop the budgeted overhead costing rate for each cost center and a blanket overhead costing rate for the entire company.

  What is the value of an fra

1) The yield curve is flat at 6% per annum. What is the value of an FRA where the holder receives interest at the rate of 8% per annum for a six-month period on a principal of $1,000 starting in two years? All rates are compounded semiannually. (A..

  Relationship that exists between the coupon interest rate

Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond.

  Prepare the stockholders equity section of the balance sheet

United Resources Company obtained a charter from the state in January of this year. The charter authorized 208,000 shares of common stock with a par value.

  Constructing a performance evaluation system

You are a manager at the Regional Med - a manufacturer of cancer detection systems and are tasked with constructing a performance evaluation system

  What is the amount of the payments that karla zehms must

using a financial calculator provide a solution to each of the following questions.a what is the amount of the

  Most recent annual reporting period

What are the company's total current liabilities at the end of the previous annual reporting period?

  What is the value of a six-month european put option

If the risk free rate is 5 percent, what is the value of a six-month European put option on the same stock with $45 strike price? Choose the closest alternative

  What is amount abc receives if the bonds are priced at par

What is the amount ABC receives if the bonds are priced at par? What is the amount ABC receives if the bonds are priced at 96, a discount? What is the amount ABC receives if the bonds are priced at 102, a premium?

  What arbitrage opportunities are open to investors

What arbitrage opportunities are open to investors? All rates are continuously compounded.

  Assume that you contribute 400 per month to a retirement

assume that you contribute 400 per month to a retirement plan for 25 years. then you are able to increase the

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