Business, 03.04.2021 05:50, Blut07ilove
Philip Morris has issued bonds that pay semiannually with the following characteristics:
Coupon Yield to Maturity Maturity Macaulay Duration
8% 8% 15 years 10 years
Required:
a. Calculate modified duration using the preceding information.
b. Explain why modified duration is a better measure than maturity when calculating the bondâs sensitivity to changes in interest rates.
c. Identify the direction of change in modified duration if
1. the coupon of the bond were 4 percent, not 8 percent.
2. the maturity of the bond were 7 years, not 15 years.
Answers: 1
Business, 22.06.2019 17:30, gghkooo1987
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Business, 22.06.2019 23:20, hernandezeileen20
Over the past several years, joyce chen has been able to save regularly. as a result, today she has $54,188 in savings and investments. she wants to establish her own business in 5 years and feels she will need $100,000 to do so. a. if she can earn 6% on her money, how much will her $54,188 in savings/investments be worth in 5 years? will joyce have the $100,000 she needs? if not, how much more money will she need? b. given your answer to part a, how much will joyce have to save each year over the next 5 years to accumulate the additional money? assume she can earn interest at a rate of 6%. c. if joyce can afford to save only $4,000 a year then, given your answer to part a, will she have the $100,000 she needs to start her own business in 5 years?
Answers: 3
Business, 23.06.2019 00:30, msc1595
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Answers: 2
Philip Morris has issued bonds that pay semiannually with the following characteristics:
Coupon Yie...
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