Using any necessary data above, calculate the Price, the Macaulay Duration and the Modified Duration...
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Finance
Using any necessary data above, calculate the Price, the Macaulay Duration and the Modified Duration for each bond. Then, predict the price change given a change in the prevailing yield. Then, assume the market yield changed, as described below. In the second table, calculate the approximate price change and new price according to duration (the first-order approximation).
Consider the following newly issued bonds:
Inputs
Juan Rojo, Incorporated 10-Year Bond
McAllister Avionics 9-Year Bond
Settlement Date
01-01-2020
01-01-2020
Maturity Date
01-01-2030
01-01-2029
Coupon Rate
0.080
0.050
Redemption Value
100
100
Coupons per Year
2
1
Market Data
Initial Yield
0.075
Yield Change
0.010
Required:
(Use cells A5 to C13 from the given information to complete this question.)
Juan Rojo, Incorporated 10-Year Bond
McAllister Avionics 9-Year Bond
Initial Price
Macaulay Duration
Modified Duration
First-Order Approximation, Price Change
Juan Rojo, Incorporated 10-Year Bond
McAllister Avionics 9-Year Bond
Price Change
New Price
Answer & Explanation
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