A 6 Percent,semiannual Coupon Bond Has a Yield to Maturity

question 50

Multiple Choice

A 6 percent,semiannual coupon bond has a yield to maturity of 7.4 percent and a Macaulay duration of 5.7.The bond has a modified duration of ________ and will have a ________ percentage increase in price in response to a 25 basis point decrease in the yield to maturity.

• A) 5.4829; 1.35
• B) 5.4966; 1.32
• C) 5.4966; 1.37
• D) 5.3073; 1.33
• E) 5.3073; 1.38