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Homework answers / question archive / Consider a 6% annual coupon bond with $ 1,000 face value and 4 years to maturity
Consider a 6% annual coupon bond with $ 1,000 face value and 4 years to maturity. If the price of the bond is 966.13 TL for a yield up to 7% maturity, what will be the approximate price foreseen according to its duration when the yield decreases to 6.5%?
=966.13*(1-(6.5%-7%)/1.07*(1*6%*1000/1.07+2*6%*1000/1.07^2+3*6%*1000/1.07^3+4*6%*1000/1.07^4+4*1000/1.07^4)/966.13)
=982.683723
