User Account

All Pages

Estimate the bond price

Assignment Help Accounting Basics
Reference no: EM132811535

Question - A government bond that trades in the market has the following characteristics:

Remaining life: 5 years

Coupon rate: 4%

Coupon frequency: Annual

YTM: 5%

Please answer the following questions.

A. Estimate the bond price.

B. Estimate the new bond prices in case yield increase by 1% or decrease by 1%, Discuss the results.

C. Estimate the macaulay and modified duration.

D. Estimate the convexity.

E. Estimate the appropriate price change using duration and convexity, discuss the results.

Reference no: EM132811535

Questions Cloud

Difference between cohort and case control study : Lourdes, you stated that the difference between the cohort and the case control study is that one is retrospective and the other is prospective.
Discuss about ways to manage stress and prevent stress : Do you know people who are happy in one way but not in others? People who are high in life satisfaction, for example, but low in enjoying life.
Determine weighted average cost of capital with tax effect : Determine the Weighted Average Cost of Capital (WACC) with no tax effect. Determine the Weighted Average Cost of Capital (WACC) with tax effect.
Name the five clusters of hofstede culture model : Name the five clusters of Hofstede culture model and explain any two key features. How do you see their impact on the growth of a country
Estimate the bond price : A government bond that trades in the market has the following characteristics: Remaining life: 5 years. Estimate the bond price
Strategic management perspective : From the Strategic management perspective consider the four main generic strategies. Select one of them (cost leadership, differentiation
Security management systems learning team assignment : Incorporate, where appropriate, information from the Risk Assessment assignment from Week 2 and the Security Management Systems Learning Team assignment.
What is the estimated deficiency : The preferred stockholders were not able to receive anything. Which corporate creditors were certainly paid in full in the absence of other data?
Identify the key mistakes that nmec made : Please help me to identify the answers on my case study. Millennium Dome, Greenwich, England

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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