Question: Consider Five-year Bond: Par value = $1000, Coupon rate = 15%, annual payments and interest rate is 9%. What is the duration of the bond?

  1. Consider Five-year Bond: Par value = $1000, Coupon rate = 15%, annual payments and interest rate is 9%.

  1. What is the duration of the bond?

  1. If interest rates rise to 10 per cent within the next year and your investment horizon is four years from today, you will still earn a 9 per cent yield on your investment. What is the Total future value of your investment after four years?

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