Question: If there is 7-year bond whose coupon rate is continuously adjusted to equal to its yield to maturity, which one below is dosest to the

 If there is 7-year bond whose coupon rate is continuously adjusted

If there is 7-year bond whose coupon rate is continuously adjusted to equal to its yield to maturity, which one below is dosest to the bond's duration? Hint: A bond with coupon rate equal to the yield to maturity will be priced at its face value, i.e., it is a par-value bond as we learnt in lecture 1. O A O year B. There is no sufficient information to get the answer. C. 7.00 years D. 6.75 years E. 6.50 years

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!