A one-year, 8% coupon bond offers an annual yield of 13% with continuous compounding and makes quarterly coupon payments.  First, calculate the bond's duration.  Then, use the duration to approximate the new price of the bond when there is an increase of 25 basis points in the bond's yield.  Assume that the face value of the bond is $1,000.

Answer rating: 100% (QA)

To calculate the bonds duration we first need to calculate the bonds present value and the present v... View the full answer