What happens to its price if treasury rates decline


Problem

You own a 30-year bond issued by Apple. The yield is 3.75%. 30-year Treasury rates are at 2.0%. The price is at par (100). What is its duration? Estimate from the duration what happens to its price if Treasury rates decline by 20 bps, but credit spreads widen by 30 bps.

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: What happens to its price if treasury rates decline
Reference No:- TGS03336620

Expected delivery within 24 Hours