The modified duration relationship-find the price of bond

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Reference no: EM131991441

GHI Corp has a 8% coupon bond making annual payments that matures in 4 years.

a) Find the duration of the bond if it has a yield to maturity of 10%.

b) Using the modified duration relationship, find the price of the bond if the yield goes up by 50bps.

c) Compared to a 12% coupon bond that has a maturity of 4 years, which bond would be most affected by a rate change? Explain without using calculations.

Reference no: EM131991441

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