What is the bond duration

Assignment Help Business Economics
Reference no: EM132115806

A five-year bond with a yield of 11% (continuously compounded) pays an 8% coupon at the end of each year. a) What is the bond's price? b) What is the bond's duration? c) Use the duration to calculate the effect on the bond's price of a 0.2% decrease in its yield.

Reference no: EM132115806

Questions Cloud

What is a price cap : What is a price cap? Why might it be a more effective way of regulating monopoly than rate of return regulation? The response must be typed.
Compare the consumer surplus and producer surplus : Compare the consumer surplus, producer surplus, and deadweight loss that arise from average cost pricing with those that arise from profit-maximization pricing.
Protection for minority factions within the bargaining units : The _____ added some protection for minority factions within the bargaining units.
Do any of these firms produce a good or service : Canada Post has a monopoly on residential mail delivery. Pfizer Inc. makes Lipitor, a prescription drug that lowers cholesterol. Rogers Communications.
What is the bond duration : a) What is the bond's price? b) What is the bond's duration? c) Use the duration to calculate the effect on the bond's price of a 0.2% decrease in its yield.
What is jackie minimum efficient scale : On Jackie's LRAC curve, what is the average cost of producing 40, 75, and 85 rides a week? What is Jackie's minimum efficient scale?
Explain the concept of litigating unemployment claims : Briefly explain the Federal Service Labor-Management Relations Act. Explain the concept of litigating unemployment claims.
Why is avalon long-run decision riskier : A Bakery on the Rise Some 500 customers a day line up to buy Avalon's breads, scones, muffins, and coffee. Staffing and management are concerns.
What type of cost is your expenditure on tickets : The Sunk-Cost Fallacy You have good tickets to a basketball game an hour's drive away. There's a blizzard raging outside, and the game is being televised.

Reviews

Write a Review

Business Economics Questions & Answers

  Determining the ebit and leverage

RAK, Inc., has no debt outstanding and a total market value of $165,000. Earnings before interest and taxes, EBIT, are projected to be $21,000

  Use moral hazard and risk aversion to describe

In your opinion, discuss when it makes sense to forego purchasing car insurance (assuming the state did not require it). In your answer, use moral hazard and risk aversion to describe your decision.

  Suppose population growth is endogenous

Suppose population growth is endogenous and therefore, variable (like what we saw in the class): What does the investment requirement line look like for this model? Characterize the set of equilibria, being sure to discuss their stability or lack the..

  Data points about demand for healthcare

Suppose from your randomized experiment you observed two data points about demand for healthcare:

  Fresh water supply system

A developer of a housing complex on an off-shore island is considering building a pipeline connecting to the fresh water supply system of the government in replacing the existing desalination plant. Assuming the daily use of water is 240 m3 calculate..

  What are the educational achievement tests

what is the test? what are the educational achievement tests in many ways for better and more comprehensive measure that we can not obtain? what is the results of an achievement test? what is the sampling principle of testing? how are you going to de..

  Make decorative stones for landscaping

You make decorative stones for landscaping. A ton of coarse stones requires 2 hours of crushing, 5 hours of sifting, and 8 hours of drying. A ton of fine stones requires 6 hours of crushing, 3 hours of sifting, and 2 hours of drying. The coarse stone..

  Consumption bundle on budget line that maximize satisfaction

Hulk goes to the gym 20 times a month. His income is $1000 per month and his visits to the gym cost $4 per visit. For simplicity, assume all other goods that Hulk consumes besides the gym costs $10 each. Assume Hulk exhibits diminishing marginal rate..

  Public good by mark rosenman

Refer to the following article: How Social Impact Bonds put Private Profit ahead of Public Good by Mark Rosenman

  Write down the amount of fun you have into a single payoff

Write down the decision box which combines the letter grade and the amount of fun you have into a single payoff for each outcome.

  Illustrate what is your optimal price and quantity

Suppose that your production facility can only produce 1,000,000 pills per year. Illustrate what is your optimal price and quantity given the production constraint.

  What will be start-ups ratio of market value to book value

Start-Up Industries is a new firm that has raised $320 million by selling shares of stock. Management plans to earn a 20% rate of return on equity, which is more than the 12% rate of return available on comparable-risk investments. What will be Start..

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd