# Question

Consider the following two bonds which make semiannual coupon payments: a 20 year bond with a 6% coupon and 20% yield, and a 30-year bond with a 6% coupon and a 20% yield.

a. For each bond, compute the price value of a basis point.

b. For each bond, compute Macaulay duration.

c. "For otherwise identical bonds, Macaulay duration is increasing in time to maturity." Is this statement always true? Discuss.

a. For each bond, compute the price value of a basis point.

b. For each bond, compute Macaulay duration.

c. "For otherwise identical bonds, Macaulay duration is increasing in time to maturity." Is this statement always true? Discuss.

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