Question: Consider a 9.5 year bond with a 4% coupon payable on a semi-annual basis: a) If par bonds of comparable maturity and credit quality are

Consider a 9.5 year bond with a 4% coupon payable on a semi-annual basis:

a) If "par" bonds of comparable maturity and credit quality are currently yielding 3.20%, What is the approximate price of this 4% bond (assume par is $1,000)?

b) Using a financial calculator, calculate the modified duration of this bond?

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ANSWER IS a The first step is to calculate the semiannual coupon payment Coupon payment 4 1000 2 20 ... View full answer

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