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You own a bond portfolio worth $31,000. You estimate that your portfolio has an average YTM...

You own a bond portfolio worth $31,000. You estimate that your portfolio has an average YTM of 6.7% and a Modified Duration of 8 years. If your portfolio's average YTM were to decrease by 5 basis points, how much would the value of your portfolio change? Round to the nearest cent. ​[Hint: Answer is positive if the portfolio value increases and negative if the value decreases]

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Answer #1

Percentage change in bond price =- Modified duration x Change in YTM Modified duration Change in YTM Percentage change in val

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