A 14-year zero coupon bond with a face value of $1,000 is currently selling for $44.6. Using the bond's modified duration, what is the approximate %age change in the price of the bond if interest rates rise by 76 basis points?

A 14-year zero coupon bond with a face value of $1,000 is currently selling for $44.6. Using the bond's modified duration, what is the approximate %age change in the price of the bond if interest rates rise by 76 basis points?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

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