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What is the modified duration

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Reference no: EM13511573

Please help me out with these questions:
1. What is the Macaulay duration of a 5.4 percent coupon bond with nine years to maturity and a current price of $1,055.40? What is the modified duration?
2. Consider a 8.4 percent coupon bond with eleven years to maturity and a current price of $1,041.40. Suppose the yield on the bond suddenly increases by 2 percent.
a. Use duration to estimate the new price of the bond
b. Calculate the new bond price
3. There is a 6.8 percent coupon bond with eight years to maturity and a current price of $1,071.30. What is the dollar value of an 01 for the bond?
4. A Treasury bond with 6 years to maturity is currently quoted at 110:14. The bond has a coupon rate of 11.1 percent. What is the yield value of a 32nd for this bond?

Reference no: EM13511573

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