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City bank has seven-year zero coupon bonds with a total face value of $20 million. The current market yield on the bonds is 8 percent, what is the price volatility if the maximum potential adverse move in yields is estimated at 30 basis points? What is the daily earnings at risk (DEAR) of this bond portfolio? (Hint round your answers to four digits and then use them). Select one: O a. 1.93 percent; $210,783.24 O b. 1.91 percent; $195,931.98 O . 1.96 percent; $244,445.47 d. 1.39 percent; $189,205.74 O e. 1.94 percent; $226,913.58

City bank has seven-year zero coupon bonds with a total face value of $20 million. The current market yield on the bonds is 8 percent, what is the price volatility if the maximum potential adverse move in yields is estimated at 30 basis points? What is the daily earnings at risk (DEAR) of this bond portfolio? (Hint round your answers to four digits and then use them). Select one: O a. 1.93 percent; $210,783.24 O b. 1.91 percent; $195,931.98 O . 1.96 percent; $244,445.47 d. 1.39 percent; $189,205.74 O e. 1.94 percent; $226,913.58

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 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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City bank has seven-year zero coupon bonds with a total face value of $20 million. The current market yield on the bonds is 8 percent, what is the price volatility if the maximum potential adverse move in yields is estimated at 30 basis points? What is the daily earnings at risk (DEAR) of this bond portfolio? (Hint round your answers to four digits and then use them). Select one: O a. 1.93 percent; $210,783.24 O b. 1.91 percent; $195,931.98 O c. 1.96 percent; $244,445.47 o d. 1.39 percent; $189,205.74 O e. 1.94 percent; $226,913.58
Transcribed Image Text:City bank has seven-year zero coupon bonds with a total face value of $20 million. The current market yield on the bonds is 8 percent, what is the price volatility if the maximum potential adverse move in yields is estimated at 30 basis points? What is the daily earnings at risk (DEAR) of this bond portfolio? (Hint round your answers to four digits and then use them). Select one: O a. 1.93 percent; $210,783.24 O b. 1.91 percent; $195,931.98 O c. 1.96 percent; $244,445.47 o d. 1.39 percent; $189,205.74 O e. 1.94 percent; $226,913.58
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