Calculate the duration of a 2-year, $1,000 bond that pays an annual coupon of 10 percent and
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Question:
Calculate the duration of a 2-year, $1,000 bond that pays an annual coupon of 10 percent
and trades at a yield of 14 percent. What is the expected change in the price of the bond if
interest rates decline by 0.50 percent (50 basis points)?
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
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