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An investor buys a three-year bond With a 8% coupon rate paid annually. The bonds yield-to-maturity is 7%. Assume a 5 basis point change in yield-to-maturity. Step 1: Calculate PVO, PV-, and PV+ to 6 decimal places per 100 of par value. Step 2: What is the bond's approximate modified duration? (round your answer to 2 decimal places)

An investor buys a three-year bond With a 8% coupon rate paid annually. The bonds yield-to-maturity is 7%. Assume a 5 basis point change in yield-to-maturity. Step 1: Calculate PVO, PV-, and PV+ to 6 decimal places per 100 of par value. Step 2: What is the bond's approximate modified duration? (round your answer to 2 decimal places)

Intermediate Financial Management (MindTap Course List)
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 14P: Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has...
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An investor buys a three-year bond With a 8% coupon rate paid annually. The bonds yield-to-maturity is 7%. Assume a 5 basis point change in yield-to-maturity. Step 1: Calculate PVO, PV-, and PV+ to 6 decimal places per 100 of par value. Step 2: What is the bond's approximate modified duration? (round your answer to 2 decimal places)
Transcribed Image Text:An investor buys a three-year bond With a 8% coupon rate paid annually. The bonds yield-to-maturity is 7%. Assume a 5 basis point change in yield-to-maturity. Step 1: Calculate PVO, PV-, and PV+ to 6 decimal places per 100 of par value. Step 2: What is the bond's approximate modified duration? (round your answer to 2 decimal places)
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