Calculate Bond Yield Relationships
Series 7 · Flashcards · Application
SERIES 7 · FLASHCARDS
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QUESTION
Identify the annual interest for a
6
%
6\%
6%
bond with
$
1,000
\$1{,}000
$1
,
000
par value.
QUESTION
Estimate
%
Δ
P
\%\Delta P
%Δ
P
for duration
7
7
7
if yields rise by
0.50
%
0.50\%
0.50%
.
QUESTION
Calculate current yield for a
5
%
5\%
5%
bond priced at
95
95
95
(par
=
$
1,000
=\$1{,}000
=
$1
,
000
).
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ANSWER
Current yield
=
50
950
≈
5.26
%
= \frac{50}{950} \approx 5.26\%
=
950
50
≈
5.26%
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