Explanation:
With YTM = 10.45% (I/Y = 5.225), PMT = 40, N = 24, FV = 1,000, PV = $834.61. With YTM = 10.07% (I/Y = 5.035), PV = $857.67, an increase of $23.06.
(Book 4, Module 57.2, LO 57.d)
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Question 100
Consider a $1,000-face value, 12-year, 8%, semiannual coupon bond with a YTM of 10.45%. The change in value for a decrease in yield of 38 basis points is closest to:
A
increase of $22.76.
B
decrease of $22.76.
C
increase of $23.06.
D
decrease of $23.06.
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