A bond is priced at 1169 and has a YTM of 0.055 when interest rates suddenly change by -80 basis points. The bond's price changes to 1213 Calculate the duration for this bond. 5.2292 4.9636 5.9067 O 5.7454 5.5295

A bond is priced at 1169 and has a YTM of 0.055 when interest rates suddenly change by -80 basis points. The bond's price changes to 1213 Calculate the duration for this bond. 5.2292 4.9636 5.9067 O 5.7454 5.5295

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 7PROB

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

Question

Give typing answer with explanation and conclusion

A bond is priced at 1169 and has a YTM of
0.055 when interest rates suddenly change by
-80 basis points. The bond's price changes to
1213
Calculate the duration for this bond.
5.2292
O 4.9636
O 5.9067
O 5.7454
5.5295

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