Considering two bonds issued by government. The one is a 30-year pure discount bond and th
A、drop less
B、rise less
C、drop more
D、rise more
A、drop less
B、rise less
C、drop more
D、rise more
Section B – TWO questions ONLY to be attempted
GNT Co is considering an investment in one of two corporate bonds. Both bonds have a par value of $1,000 and pay coupon interest on an annual basis. The market price of the first bond is $1,079?68. Its coupon rate is 6% and it is due to be redeemed at par in five years. The second bond is about to be issued with a coupon rate of 4% and will also be redeemable at par in five years. Both bonds are expected to have the same gross redemption yields (yields to maturity).
GNT Co considers duration of the bond to be a key factor when making decisions on which bond to invest.
Required:
(a) Estimate the Macaulay duration of the two bonds GNT Co is considering for investment. (9 marks)
(b) Discuss how useful duration is as a measure of the sensitivity of a bond price to changes in interest rates. (8 marks)
A、98.65
B、101.36
C、106.43
D、空
A. Yes.
B. No, Bond A’s nominal yield spread should be less than Bond C’s.
C. No, Bond B’s nominal yield spread should be less than Bond C’s.
A.What is the yield to maturity of the 2-year zero? The 2-year coupon bond?
B.What is the forward rate for the second year?
C.If the expectations hypothesis is accepted, what are (1) the expected price of the coupon bond at the end of the first year and (2) the expected holding-period return on the coupon bond over the first year?
D.Will the expected rate of return be higher or lower if you accept the liquidity preference hypothesis?
What was the man considering?
A.Being employed by the two men.
B.Opening a branch in the center.
C.Passing their management to George and Jan
A、Zero
B、Single double bond
C、More than one double bond
D、Two double bonds
Two different bond lengths are observed in the PF5molecule,but only one bond length is observed in SF6. Explain the difference.
A.persuaded
B.agreed
C.suggested
D.considering
A.higher than that on the noncallable bond
B.lower than that on the noncallable bond
C.the same as that on the noncallable bond
D.that one cannot tell which one of the two bonds should have a higher return
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