Homework answers / question archive / A bond that pays 5% interest semiannually has a 6% required rate of return and a price of $1045

A bond that pays 5% interest semiannually has a 6% required rate of return and a price of $1045

Finance

Share With

A bond that pays 5% interest semiannually has a 6% required rate of return and a price of $1045. Annual interest rates are now projected to increase by 80 basis points. The bond has a maturity 7 years and its duration is 5 years. What is the predicted new bond price after the interest rate change?