We have following data for a corporate bond: - Nominal value $100,000 - Semiannual coupon rate 5%.
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Question:
We have following data for a corporate bond:
- Nominal value $100,000
- Semiannual coupon rate 5%.
- Coupons are paid semiannually with redemption of face value at the end.
- Maturity 3 years
With information given above, answer following questions:
a) Calculate price of the bond
b) Calculate duration (according to Macaulay) if bond has a market rate of 4% semiannually.
c) Calculate Modified Duration
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