Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you just purchased a 10 year 6% corporate bond tha

You just purchased a 10 year 6% Corporate bond that pays interest semi-annually and has...

80.2K

Verified Solution

Question

Finance

  1. You just purchased a 10 year 6% Corporate bond that pays interest semi-annually and has a modified duration of 8.4. Which of the following is true if interest rates were to immediately decrease 0.50% or 50 basis points the day after your purchase?

    1.

    The price would rise by approximately 4.2%
    2.

    The price would rise by approximately 8.4%
    3.

    The price would decline by approximately 4.2%
    4.

    The price would decline by approximately 8.4%

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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

All vectors are in R^ n. Prove the following statements. a) v·v=||v||2 b) If ||u||2 + ||v||2...

Basic Math
Q

Discuss the difference between O&M expenses and capital improvement expenses. How does airport financial accounting factor into...

Operations Management
Q

Part B How many grams of dry NH4Cl need to be added to 2.40 L...

Chemistry
Q

A disk diffusion test using Staphylococcus gave the following results Disinfectant Zone of inhibition mm...

Biology
Q

m rket economic system an economy is largely dis embedded from political or social institutions...

Biology
Q

7 reflection across the x axis y R A S X

Geometry
Q

The following data represent the modes of transportation to campus of 20 students in a...

Basic Math
Q

7. On a group trip to a certain city, 20 people who were 25 years...

Basic Math
Q

You want to determine if sex and or city of residence impact salary You recruit...

Statistics
Q

Find the y intercept and slope of the lin y 2 3

Calculus
Q

Information for two companies follows: (1) Compute the degree of operating leverage (DOL) for each...

Accounting
Q

You will calculate four forward rates since the spot rate for 3 months is also...

Finance