Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. i. calculate the value of macaulays duration for a

i. Calculate the value of Macaulays duration for a 10-year, $1000 par value bond purchased...

50.1K

Verified Solution

Question

Finance

i. Calculate the value of Macaulays duration for a 10-year, $1000 par value bond purchased today at a yield to maturity of 14% and a coupon rate of 10%.

ii. From the answer in (i) calculate the modified duration of the bond assuming the prevailing interest rate is still 14%.

iii. Now suppose the market interest rate on comparable bonds falls to 13 percent. What will be the approximate percentage change in the bond price.? (Hint: use the modified duration for your computation in (ii))

iv. Given the information in (i), did the bond sell at a discount or premium?

v. One of the most important structural changes affecting the banking community in Ghana is the drive towards consolidation. Discuss three benefits of this move to the Ghanaian economy.(You answer should not exceed 600 words) (9 marks)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

For each of the research studies described below, select which of the following analyses would be...

Basic Math
Q

What do the DFA results indicate about what might be causing this disease?

Medical Sciences
Q

A major attraction in Entebbe, Uganda, is to watch water drain from a bucket on both...

Physics
Q

6 A 53 year old man seeks treatment for increasing fatigue night sweats and bruising...

Biology
Q

Galvanometer G having full scale deflection current and resistance R is used in combination with...

Physics
Q

During the propagation of electromagnetic waves in a me dium a Both electric and magnetic...

Physics
Q

A biologist has a 691-gram sample of a radioactive substance. Find the mass of the...

Basic Math
Q

13. This exercise is about the simultaneous equations4y - 8x = 4y = 2x +...

Basic Math
Q

if the interest rate beingQuestion #25 of 25 During the accumulation period, how is...

Accounting
Q

help quick please Data table Data table...

Accounting
Q

Use straight line depreciation instead of $140 3. (20 points) The...

Accounting
Q

During 2020, Hugh Hughes reported the following income and loss: Activity X ($50,000) ...

Accounting