A ten-year bond with a 9 percent coupon will sell for $1,000 when interest rates are 9

Question:

A ten-year bond with a 9 percent will sell for $1,000 when interest rates are 9 percent. What is the duration of this bond? Using duration to forecast the change in the price of the bond, calculate the difference between the forecasted and the actual price change according to the bond valuation model for the following interest rates: 9.2, 9.4, 9.6, 9.8, 10, 10.5, 11, and 12 percent.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...