Market yield of the bond

by | Sep 10, 2021 | Assignment Help

CB-W rated corporation has issued debentures each with a face value of $1,000 with a fixedinterest annual coupon of 9 %t per annum and a maturity of 3 years. The debenture current quote is $1,080.19 a) Show that the market yield on the bond is 6%. (4 marks) b) What is the duration for the above bond? (4 marks) c) You are expecting the Reserve Bank of Australia to change interest rates to 5%. Using the duration method what will be the new price of the bond? (2 marks) Note: If you did not answer (b) use a duration of 2.5 years.

This is a sample question

Need help with a similar assignment?

Place an order at Study Pirate

Attach all custom instructions.

Make Payment. (The total price is based on number of pages, academic level and deadline)

We’ll assign the paper to one of writers and send it back once complete.