HW3.pdf - University of Connecticut School of Business FNCE...

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University of Connecticut School of Business FNCE 5181 Assaf Eisdorfer Fundamentals of Financial Management Fall 2015 Assignment 3 1. Consider a bond with 4 years to maturity that has a 9.25% coupon rate. If the market interest rate is 10%, how much will the bond’s price change if the market interest rate falls by 1%? (First, calculate the prices before and after the rate change. Then, use duration to calculate the approximate price change.) 2. If a bond that is repaid quarterly offers an APR of 9.6%, what is the bond’s effective annual
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  • Spring '12
  • Rush
  • Finance, Economics terminology, XYZ Company, Assaf Eisdorfer

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