Entries by Hannah Wangui

A four-year coupon bond with annual coupon rate of 5% is currently selling at a yield to maturity of 6%.

November 21, 2020 in /by

A four-year coupon bond with annual coupon rate of 5% is currently selling at a yield to maturity of 6%. (a) Calculate the modified duration of this bond. (b) What is the predicted dollar price change of this bond using modified duration, assuming that its yield to maturity decreases by 0.5%?   Looking for a […]

 

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A one-year zero-coupon bond with a face value of $100 sells for $99.46, a two-year zero-coupon bond sells for $97.23, and a 3-year zero-coupon bond sells for $90.50

November 21, 2020 in /by

A one-year zero-coupon bond with a face value of $100 sells for $99.46, a two-year zero-coupon bond sells for $97.23, and a 3-year zero-coupon bond sells for $90.50. Suppose a new coupon paying bond, making annual coupon payments, is issued today with a face value $100, maturity of 3 years, and an annual coupon payment […]

 

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Suppose that the term structure is currently flat so that bonds of all maturities have yields to maturity of 10%. Currently a 5 year coupon bond with annual coupons (with the first one due in 1 year) and face value of $1,000 is selling at par.

November 21, 2020 in /by

Suppose that the term structure is currently flat so that bonds of all maturities have yields to maturity of 10%. Currently a 5 year coupon bond with annual coupons (with the first one due in 1 year) and face value of $1,000 is selling at par. A year from now interest rates will be depend […]

 

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For the IS/LM curves, why does the IS curve shift up when government spending increases? If government spending increases, then saving decreases so wouldn’t the IS curve shift up because people invest more

November 21, 2020 in /by

For the IS/LM curves, why does the IS curve shift up when government spending increases? If government spending increases, then saving decreases so wouldn’t the IS curve shift up because people invest more? I have trouble understanding the logic for the shifts in the IS curve.   Looking for a Similar Assignment? Order now and […]

 

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