7. What is the duration of a debt that pays $100, $90, $120 and $1100 in...

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7. What is the duration of a debt that pays $100, $90, $120 and $1100 in next four semi-annuals? Assuming the debt's current price is $1000. 8. Kalanga Mafeking is thinking about purchasing a new 6% 8-year bond that is being issued by the Bechuanaland Copper Corporation. If she buys it at par, what will the bond's duration be? If, after the Bechuanaland Copper bonds start trading in the secondary market, their yield declines by 20 basis points, how much will their price change by? 7. What is the duration of a debt that pays $100, $90, $120 and $1100 in next four semi-annuals? Assuming the debt's current price is $1000. 8. Kalanga Mafeking is thinking about purchasing a new 6% 8-year bond that is being issued by the Bechuanaland Copper Corporation. If she buys it at par, what will the bond's duration be? If, after the Bechuanaland Copper bonds start trading in the secondary market, their yield declines by 20 basis points, how much will their price change by?

Answer rating: 100% (QA)

To calculate the duration of the debt we first need to find the present value of the cash flows Usin... View the full answer