Determining the duration of bond, Finance Basics

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Determining the duration of bond

Problem:

A portfolio manager wants to estimate the interest rate risk of a bond using duration. The current price of the bond is 82. A valuation model found that if interest rates decline by 30 basis points, the price will increase to 83.50 and if interest rates increase by 30 basis points, the price will decline to 80.75.

Required:

What is the duration of this bond?

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Finance Basics: Determining the duration of bond

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Finance Basics: Determining the duration of bond

Reference No:- TGS0879629

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Determining the duration of bond

Reference No:- TGS0879629

Recent Questions Asked Finance Basics

Q : Write name of known organizations that are bureaucracies

Q : Price-cash flow ratio

Q : Expected return and standard deviation

Q : Estimate body time using molecular timetable of 168 genes

Q : Determining the duration of bond

Q : Develop the equation of the regression model

Q : Experiencing rapid growth

Q : What will the reorder point be for the item

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