A corporate bond has 2 years to maturity, a coupon rate of 6%, a face...
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Finance
A corporate bond has 2 years to maturity, a coupon rate of 6%, a face value of $1,000 and pays coupons semiannually. The market interest rate for similar bonds is 0.075. ** use financial calc or excel if needed
please answer following questions
- . What is the price of the bond (in $)?
- What is the bond's duration?
- If yields fall by 0.8 percentage points, what is the new expected bond price based on its duration (in $)?
- What is the actual bond price after the change in yields (in $)?
- What is the difference between the two new bond prices (in absolute $)?
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