Consider a 5.4 percent coupon bond with nine years to maturity and a current pri

Question

Consider a 5.4 percent coupon bond with nine years to maturity and a current price of $1,055.40. Suppose the yield on the bond suddenly increases by 2 percent.

Use duration to estimate the new price of the bond. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Calculate the new bond price. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Use duration to estimate the new price of the bond. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

1021.96

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