Two bonds are available for purchase in the financial markets. The first bond is a 2-year, $1,000
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Question:
Two bonds are available for purchase in the financial markets. The first bond is a 2-year,
$1,000 bond that pays an annual coupon of 10 percent. The second bond is a 2-year,
$1,000, zero-coupon bond.
a. What is the duration of the coupon bond if the current yield-to-maturity (YTM) is 8
percent? 10 percent? 12 percent? (Hint: You may wish to create a spreadsheet
program to assist in the calculations).
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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