-
+1 - 312-224-1615
Get in touch with us
-
support@helpwithassignment.com
Send us an e-mail
Solution Library
Calculation of Percentage Change in Bonds Price when Interest Rate Changes
Question
What are the duration and modified duration of a seven-year, 3.5 percent coupon rate, annual coupon payment, $1000 par value government note priced today to yield 3 percent to maturity (use the text formulas or Excel’s Duration and MDuration functions)? What is the convexity of this instrument? [Recall that Bonds and Bond Properties.xls illustrates these calculations.] Using one of the following approximation formulas with yield data in decimal form,
[if text formula] % Change in Price 100 (-1.0 Duration (YieldNew-YieldOld)/(1+YieldOld)),
[if Excel function] % Change in Price 100 (-1.0 MDuration (YieldNew-YieldOld)),
what is the approximate percentage change in this bond's price if yields on comparable securities rise to 4 percent? What is the actual percentage change in this bond's price if yields on comparable securities rise to 4percent (use a financial calculator or Excel’s PV function)?
Summary
This question belongs to finance and discusses about Macaulay duration and modified duration of bonds.
Total word count: 71
Download Full Solution
WHAT OUR STUDENTS SAY
1. Process control assignments in chemical engineering were a very difficult challenge for me. I was totally unsure about the application of laplace transform and differential equation in chemistry. Then I came across HwA and their experts are truly knowledgeable. She helped me with my assignments and showed, actually how easy it is.
Laurie Bunting Student
Math is one of the most adaptive subjects to the online classroom. With a multitude of tools and ways to communicate, math tutoring online with TheReliableTutor has proven to help students like me make incredible improvements in overall math performance as well as on specific tests and exams.
Debbie Borge Student
I have never experienced managerial accounting explained so clearly before. The online managerial assignment experts at TheReliableTutor are very professional and clear in their communication. Their prices are also right for a student like me on a tight budget.
Lee Tan Student
Thank you guys for your great assistance. Loved the way you dealt with the assignment. Very satisfied with the work and will use your service again.
Emily Student
The care and patience with which the online Labor Economics expert at HwA guided me through the assignment topic was simply amazing. She was always ready with the solutions to my queries and incorporated any suggestions that I made into the Labor Economics Assignment essay. It was just the guidance I needed to write my Labor economics assignment.
Noel Saunders Student
Comments
this is a very good website
I have 50 questions for the same test your page is showing only 28
hi can you please help or guide me to answer my assignments. thanks
hi can anyone help or guide me to my assignments. thanks
This solution is perfect ...thanks
Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes
Perfect bank of solution.
great !
thanks for the quick response. the solution looks good. :)
thnx for the answer. it was perfect. just the way i wanted it.
works fine.