Suppose you buy a coupond bond with 5% yield. The maturity of this bond is 11 years, the modified duration of this bond

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899604
Joined: Mon Aug 02, 2021 8:13 am

Suppose you buy a coupond bond with 5% yield. The maturity of this bond is 11 years, the modified duration of this bond

Post by answerhappygod »

Suppose you buy a coupond bond with 5% yield. The maturity of
this bond is 11 years, the modified duration of this bond is 8
years, and the Macaulay duration of this bond is 9 years. Interest
rates have increased after your purchase. If you want to earn a
return higher than 5%, when should you sell the bond?
in 7 years
in 8 years
in 10 years
in 9 years
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Post Reply