What is the expected change in the price of the bond

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Reference no: EM132046509

Consider the following. a. What is the duration of a two-year bond that pays an annual coupon of 12 percent and whose current yield to maturity is 14 percent? Use $1,000 as the face value. (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) Duration of a bond ?

b. What is the expected change in the price of the bond if interest rates are expected to decline by 0.4 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Expected change in the price?

Reference no: EM132046509

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