Question: Consider the following a What is the duration of a

Consider the following.
a. What is the duration of a five-year Treasury bond with a 10 percent semiannual coupon selling at par?
b. What is the duration of the above bond if the yield to maturity (ytm) increases to 14 percent? What if the ytm increases to 16 percent?
c. What can you conclude about the relationship between duration and yield to maturity?

View Solution:

Sale on SolutionInn
  • CreatedJanuary 27, 2015
  • Files Included
Post your question