Suppose NCKU company currently has NTD 10 million of five-year bonds with a coupon rate of 2%, a yield-to-maturity of 3.25% and a remaining life of two years and NTD 20 million of ten-year bonds with a coupon rate of 3.5%, a yield-to-maturity of 4.5% and a remaining life of three years. These two bonds pay coupons semi-annually. Assuming the settlement date is January 1, 2022. What is the portfolio modified duration of these two bonds using the Aggregate Cash Flow approach? years (Please round the answer to the nearest two decimal places)
Suppose NCKU company currently has NTD 10 million of five-year bonds with a coupon rate of 2%, a yield-to-maturity of 3.25% and a remaining life of two years and NTD 20 million of ten-year bonds with a coupon rate of 3.5%, a yield-to-maturity of 4.5% and a remaining life of three years. These two bonds pay coupons semi-annually. Assuming the settlement date is January 1, 2022. What is the portfolio modified duration of these two bonds using the Aggregate Cash Flow approach? years (Please round the answer to the nearest two decimal places)
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 13P
Related questions
Question
D4)
Suppose NCKU company currently has NTD 10 million of five-year bonds with a coupon rate of 2%, a yield-to-maturity of 3.25% and a remaining life of two years and NTD 20 million of ten-year bonds with a coupon rate of 3.5%, a yield-to-maturity of 4.5% and a remaining life of three years. These two bonds pay coupons semi-annually. Assuming the settlement date is January 1, 2022.
What is the portfolio modified duration of these two bonds using the Aggregate Cash Flow approach? years (Please round the answer to the nearest two decimal places)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,