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| Teaching Since: | Apr 2017 |
| Last Sign in: | 419 Weeks Ago |
| Questions Answered: | 3232 |
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MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
1. Look up prices of 10 U.S. Treasury bonds with different coupons and different maturities. Calculate how their prices would change if their yields to maturity increased by 1 percentage point. Are long- or short-term bonds most affected by the change in yields? Are high- or low-coupon bonds most affected?
2. Look again at Table 3.4. Suppose the spot interest rates change to the following downward sloping term structure: r 1 = 4.6%, r 2 = 4.4%, r 3 =4.2%, and r 4 4.0%. Recalculate discount factors, bond prices, and yields to maturity for each of the bonds listed in the table.
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