An FI purchases at par value a $100 000 Treasury Bond paying 10% interest with a 7.5 year duration.If interest rates rise by 4%, calculate the bond's new value.Recall that Treasury Bonds pay interest semi-annually.Use the duration valuation equation.
A)+$28 571.43
B)-$20 864.46
C)+$20 864.46
D)-$28 571.43

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The Answer of An FI purchases at par value a $100 000 Treasury Bond paying 10% interest with a 7.5 year duration.If interest rates rise by 4%, calculate the bond's new value.Recall that Treasury Bonds pay interest semi-annually.Use the duration valuation equation.
A)+$28 571.43
B)-$20 864.46
C)+$20 864.46
D)-$28 571.43

An FI Purchases at Par Value a $100 000 Treasury