A Pfizer Bond Has a YTM of 7%, It Is

question 60

Essay

A Pfizer bond has a YTM of 7%, it is selling for $980, and its Macaulay duration is 5 years. Assume the required yield increases to 7.4%. What is the new price predicted by modified duration? Is the actual estimated price higher or lower than that predicted by modified duration?

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Definitions:

Monopolizing Conversations

Dominating the dialogue by continuously speaking and not allowing others the opportunity to contribute.

Round Robin Method

A technique used in group discussions where each participant is given an opportunity to speak in a circulatory order, ensuring equal participation.

Team Member

An individual who is part of a group working together towards a common goal or objective.

Dysfunctional

Relates to behaviors or processes that negatively impact the effectiveness or efficiency of an organization or system.