What is the duration of the bond

Assignment Help Financial Management
Reference no: EM131813183

1. Consider a bond with a $1,000 par value, five years to maturity, with a 6% annual coupon. The yield to maturity is 8% and the bond is selling for $920.15. What is the duration of the bond?

2. A bond has a YTM of 8%, a modified duration of 12 years, a duration of 22 years and a 30 year maturity. By what percentage will the bond’s price change if market interest rates increase by 0.5%?

3. You plan to invest $20,000 now and hope to earn 10% a year for the next 10 years. If your expectations are met, how much will your investment be worth in 10 years?

Reference no: EM131813183

Questions Cloud

Explain the concept of a stable economic equilibrium : Using an appropriate diagram, explain the concept of a stable economic equilibrium and provide your assessment of whether or not the US economy
Review problem related to the systolic blood pressure : The systolic blood pressure X of adults in a region is normally distributed with mean 112 mm Hg and standard deviation 15 mm Hg.
How do bond prices change with changes in interest rates : Find a quote from Sun Tzu and describe how it applies to Business. How do bond prices change with changes in interest rates?
How much would an investor be willing to pay for property : Assuming a 10% required rate of return, how much would an investor be willing to pay for the property?
What is the duration of the bond : Consider a bond with a $1,000 par value, five years to maturity, with a 6% annual coupon. What is the duration of the bond?
Investment manager offers you two options : If an investment manager offers you two options: a bond of a company at $100 each and a stock of the same company at $100 each,
Identify how google unique workplace uses processes : Using the Basic OB Model identify how Google's unique workplace uses processes, Do you have massage therapy services or a "free food" cafeteria
Forecasting demand for supplemental health-life insurance : Identify sources of syndicated data that would be useful in forecasting the demand for supplemental health and life insurance.
Probability that next man juliet meets will have a height : Heights X of adult men are normally distributed with mean 69.1 inches and standard deviation 2.92 inches. Juliet, who is 63.25 inches tall.

Reviews

Write a Review

Financial Management Questions & Answers

  Planning new convention center

A city is planning a new convention center and has received bids from two contractors. One contractor's proposal would cost $10,000,000 to build plus upkeep of $150,000 per year for its expected 30-year life span. Annual revenues are known with certa..

  Calculate the cost of capital for a company

You have been asked to calculate the cost of capital for a company with the following information. The company has $7,500,000 in face value bonds, trading at 96.5% of face value. The YTM on these bonds is 5.75%. Given this information, what is the es..

  Trade commission about this word-of-mouth marketing campaign

Advocacy groups have complained to the Federal Trade Commission about this word-of-mouth marketing campaign.

  Double your money savings account

A financial institution offers a "double your money" savings account in which you will have $2 in 7 years for every dollar you invest today. What stated annual interest rate (assuming monthly compounding) does this account offer?

  Calculate the sell-through percent for the month

Calculate the sell-through percent for the month. 62.86% 16. For a six-month period the markdowns for the gift department were 15.25%.

  What is price per share of the company stock

What is the price per share of the company's stock?

  Find the present value of the second perpetuity

The present value of an increasing perpetuity due with quarterly payments $100, $200, $300, etc. is three times the present value of a perpetuity immediate with level queerly payments $500. If both perpetuities use the same annual effective interest ..

  Mary and marty interested in obtaining a home equity loan

What will their credit limit be if the bank bases their credit limit on equity invested and will loan them 70% of the equity?

  What is the company total market value of debt

Jiminy's Cricket Farm issued a 30-year, 8 percent semi-annual bond 7 years ago. The bond currently sells for 88 percent of its face value. The book value of the debt issue is $16 million. The company's tax rate is 34 percent. What is the company's to..

  The mortgage interest rate charged increases

A mortgage broker is offering a $280,000 25-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 4.6 percent APR interest rate. After the second year, the mortgage interest rate charg..

  What is unidas after-tax debt cost of capital

What is Unidas after-tax debt cost of capital? What is Unida's weighted average cost of capital?

  What is the after-tax cash flow from sale of the equipment

Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. The obsolete equipment, which originally cost $39 million, has been depreciated straight-line over an assumed tax life of 5 years, but it can be s..

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