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Calculate the Macaulay duration of a 9%, $1,000 par bond that matures in three years if...

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Finance

Calculate the Macaulay duration of a 9%, $1,000 par bond thatmatures in three years if the bond's YTM is 14% and interest ispaid semiannually. You may use Appendix C to answer thequestions.

A. Calculate this bond's modified duration. Do not roundintermediate calculations. Round your answer to two decimalplaces.

B. Assuming the bond's YTM goes from 14% to 13.0%, calculate anestimate of the price change. Do not round intermediatecalculations. Round your answer to three decimal places. Use aminus sign to enter negative value, if any.

Answer & Explanation Solved by verified expert
4.1 Ratings (877 Votes)
AK Nx2Bond Price Coupon1 YTM2k Par value1 YTM2Nx2k1K 3x2Bond Price 910002001 14200k 10001 142003x2k1Bond    See Answer
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