What is the change in price bond will experience in dollars

Assignment Help Financial Management
Reference no: EM131072421

A 7 percent coupon bond with 8 years left to maturity is priced to offer a 7.75 percent yield to maturity . You believe that in one year, the yield to maturity will be 7.4 percent. What is the change in price the bond will experience in dollars?

Reference no: EM131072421

Questions Cloud

How much should he save every (good) time period : If this individual thinks about the fact that he may be unemployed in any time period, how much should he save every (good) time period in order to have the maximum average or expected utility over time?
What is the value of one-year european call option : A stock price is currently $46. Over each of the next 2 6-month periods it is expected to go up by 10% or down by 10%. The risk-free rate is 8% per annum with continuous compounding. What is the value of a 1-year European call option with a strike pr..
Fixed operating coasts : Kendall Inc. makes widgets. they have fixed operating coasts of $25,000. Their variable operating costs are $20,000 per widget but they are in demand so they can sell them for $50,00 each. What level of sales should they have to have in order to brea..
What are the advantages of ambush marketing : What are the advantages and disadvantages (risks and consequences) of ambush marketing? What was Bavaria Beer hoping to achieve through its ambush marketing tactics?
What is the change in price bond will experience in dollars : A 7 percent coupon bond with 8 years left to maturity is priced to offer a 7.75 percent yield to maturity . You believe that in one year, the yield to maturity will be 7.4 percent. What is the change in price the bond will experience in dollars?
Debate the importance of professionalism in corrections : Debate the importance of professionalism in corrections when the costs of corrections (e.g., care, housing, feeding of offenders, etc.) are steadily increasing. Provide a rationale for your response.
Currently hold market index portfolio : Based on current dividend yields and expected capital gains, the expected rates of return on portfolios A and B are 11% and 14%, respectively. The beta of A is 0.8, while that of B is 1.5. If you currently hold a market index portfolio, would you cho..
Contracts are governed primarily by contract common law : The Uniform Commercial Code governs sales contracts. Other contracts are governed primarily by contract common law. Identify a situation where the UCC differs from contract common law. Why do you think that difference exists?
Determine the risks that are unique to thrift operations : Determine the risks that are unique to thrift operations compared to commercial banks. Describe how the thrift should manage each risk identified.

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare financial statements in proper form for sci

Prepare financial statements in proper form for SCI, including a non-consolidated statement of financial position, a statement of comprehensive income and a statement of changes in equity.

  What is expected dividend per share

Brigham and Houston just paid a dividend of $2.00. The dividend is expected to grow 30% a year for the next 3 years and then at a rate of 6% a year thereafter. What is the expected dividend per share for Year 4?

  Reconciling the differences between the two balances

Legder Hawkins Company showed a cash balance of $ 17,569 per 3 July 2015. Hawkins Bank account showed cash balance of $ 16,432. the following information may be useful in reconciling the differences between the two balances is as follows: a deposit o..

  An asset has had an arithmetic return-geometric return

An asset has had an arithmetic return of 10.5 percent and a geometric return of 8.5 percent over the last 94 years. What return would you estimate for this asset over the next 12 years? 18 years? 32 years?

  What would be the fair forward price for this contract

S&P 500 index has a dividend yield of 3% today. The current index is trading at $1800 and the risk-free interest rate is 5% per annum with continuous compounding. An investor would like to enter into a short one-year forward contract on the index. Wh..

  Calculate the operating cash flow for the year

Tubby Toys estimates that its new line of rubber ducks will generate sales of $7.60 million, operating costs of $4.60 million, and a depreciation expense of $1.60 million. Assume the tax rate is 35%. Calculate the operating cash flow for the year by ..

  Target debt-equity ratio and cost of debt

Lannister Manufacturing has a target debt−equity ratio of .45. Its cost of equity is 13 percent, and its cost of debt is 7 percent. If the tax rate is 34 percent, what is the company’s WACC?

  Explain the difference between this and a regular swap

A company enters into a total return swap where it receives the return on a corporate bond paying a coupon of 5% and pays LIBOR. Explain the difference between this and a regular swap where 5% is exchanged for LIBOR. Please explain in detail

  What is the net operating profit after taxes

Using Rhodes Corporation’s financial statements (shown below), answer the following questions. What is the net operating profit after taxes (NOPAT) for 2010? What are the amounts of net operating working capital for both years? What are the amounts o..

  What is mean by bank liquidity and bank solvency

What are the major asset categories for banks? Identify the most important category. What are the bank's major liabilities and which category is the largest in size? 3. What is mean by bank liquidity and bank solvency?

  Calculate the annual return on the mutual funds

Suppose an individual invests $37,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 4.1 percent of the amount invested and is deducted from the original funds invested. calculate the annual return on the m..

  What is present value of perpetuity quarterly payments

What is the present value of a perpetuity making quarterly payments in arrears in the amount of $10,065 per quarter, and the appropriate annual rate of interest is 12.4%?

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