A bond with a coupon rate of 11 percent sells at a yield to maturity of 12 percent. If the bond matures in 10 years, what is the Macaulayduration?Note: Do not round intermediate calculations. Round your answer to 3 decimal places.Macaulay durationyears

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Answered: A bond with a coupon rate of 11 percent…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

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Similar questions

Consider a coupon bond that has a $1.000 par value and a coupon rate of 9%. The bond is currently selling for $1,150 and has 9 years to maturity. What is the bond's yield to maturity?
What is the price of a two year bond with a 9% annual coupon and a yield to maturity of 8%?
Find the limiting value of Macaulay duration as maturity is increased to infinity of an 8% coupon bond that is trading at a yield of 8% and pays coupons every 6 months. Please round your numerical answer to the nearest integer.
A corporate bond pays 6% of its face value once per year. If this $10,000 10-year bond sells now for $10,450, what yield will be earned on this bond? Assume the bond will be redeemed at the end of 10 years for $10,000. The yield to maturity is %. (Round to two decimal places.)
Ex: Consider a discount bond that has a 1000 TL face value. Current price of the bond is 900 TL and the bond has two years to maturity. What is the yield to maturity for this bond?
What is the percentage change in price for a zero coupon bond if the yield changes from 6.5% to 5.5%? The bond has a face value of$1,000 and it matures in 10 years. Use the price determined from the first yield, 6.5%, as the base in the percentage calculation
A five-year bond with a yield of 11% (continuously compounded) pays an 8% coupon at the end of each year. a) What is the bond’s price? b) What is the bond’s duration? c) Use the duration to calculate the effect on the bond’s price of a 0.2% decrease in its yield. d) Recalculate the bond’s price on the basis of a 10.8% per annum yield and verify that the result is in agreement with your answer to (c).
Define the term Yield to Maturity?
Assume you purchase (at par) one 11-year bond with a 6.95 percent coupon and a $1,000 face value. Suppose you are only able to reinvest the coupons at a rate of 4.95 percent. If you sell the bond after 6 years when the yield to maturity is 7.95 percent, what is your Face Value?
Assume that a bond has a face value of $250,000. It has a maturity of 1 year and the coupon rate of interest is 5%. If the current market price of this bond is $225,000, what is the yield to maturity? If the market price of the bond increases to $240,000, what happens to the yield to maturity?
f a coupon bond has two years to maturity, a coupon rate of 8%, a par value of $1000, and a yield to maturity of 12%, then the coupon bond will sell for $ ? (Round your response to the nearest two decimal place) What will the coupon bond sell for?
Calculate the current yield on a bond that has an annual interest payment of $200 and a resale price of $1,550

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A bond with a coupon rate of 11 percent sells at a yield to maturity of 12 percent. If the bond matures in 10 years, what is the Macaulay duration? Note: Do not round intermediate calculations. Round your answer to 3 decimal places. Macaulay duration years