falconwiren7457 falconwiren7457

07-07-2021
Business

contestada

The current price of an annual coupon bond is 100. The derivative of the price of the bond with respect to the yield to maturity is -700.The yield to maturity is an annual effective rate of 8%. Calculate the duration of the bond.

Respuesta :

Priatouri Priatouri

09-07-2021

Answer:

The duration of the bond = 7.56 years

Explanation:

Given the current price = 100

DM = -1 x Current derivative price / Current price

DM = (-1 x -$700 / $100)

DM = 7

Now, D = DM (1 + r)

D = 7 (1 + 0.08)

D = 7.56

The duration of the bond = 7.56 years

Answer Link

Otras preguntas

If you bought a home that cost $100,000, it is currently worth $200,000, and you still owe $50,000 on it, how much equity do you have in the home?.

Find the LCM of 8a²y²z and 56ayz³

Write a composition describing a visit to the hills

transulate in english: Join a group of four Write a poem about Maliha and its importance to Emirati heritage and heritage Present your poem for the rest of the

Please help!!! Hydrogen bonds can be found between molecules of which substance? Responses A. HF B. H2 C. CH4 D. C3H8

WHOEVER GETS THIS RIGHT GETS 95 POINTS Determine which integer will make the inequality x − 4 < 16 true. A) S:{16} B) S:{20} C) S:{21} D) S:{32}

Which expression is equivalent to (m−3n−4)−3? m9n12 m−9n−12 m−6n−7 1 over the quantity m raised to the sixth power times n raised to the seventh power end q

La resistencia taína en la isla de Santo Domingo, desarrolló

A 21 KG chair initially at rest on a horizontal floor requires a 167 N horizontal force to set it in motion once the chair is in motion a 132 N horizontal force

3. Solve for x: 2x+4=x-6. a. x=-12 b. x = 10 C. X=-16 d. x=-10