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Basic Question 3 of 4
What is the estimated new price of a semi-annual-pay 9%, 15-year bond with an 8.5% yield if rates decrease by 25 basis points?
B. 104.19
C. 106.39
A. 58.76
B. 104.19
C. 106.39
User Contributed Comments 8
| User | Comment |
|---|---|
| sivenkova | Why 8,25? In the task it is stated as 8,5? Is it a mistake? |
| alki | yield decreases 25 bps to 8.25 |
| Oarona | Thanks Alki. Good observation |
| jonan203 | dude, this question is like one sentence long and you missed "rates decrease 25 basis points"? |
| praj24 | how did you know.... FV = 100? |
| ocshing | praj24 I just tried with par value of 1000 and I get PV=1063.87..you can't simply go wrong whether you have chosen FV=100 or 1000 |
| ascruggs92 | praj24, please, for your own good, read the notes. |
| khalifa92 | guys always read slowly and try to understand the question properly because trying to solve fast and move on |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
calculate a bond's price given a yield-to-maturity on or between coupon dates
CFA® 2024 Level I Curriculum, Volume 4, Module 6.