Instructions

This is the third of six problem sets. We will choose the best four grades of the Six problem sets for grading.

The Problem sets are worth totally $20\%$ of the grade. This Problem Set # $3$ is worth $5\%$ of the grade.

Please upload the answer as a separate file. In your answer, show how you got the answer.

You will not be posting it as a discussion in public.

Problem Set $3$

What is the price of a Bond with $$1,000$ face value, paying an $8\%$ coupon rate paid which is paid semi$-$annually, and it has a required return of $7\mathrm{.}5\%$ if:

The bond has $16$ years maturity?

The bond has $20$ years maturity?

What is the Duration of the bond if it has $16$ years maturity, given the above information?

What is the Duration of the bond if it has $20$ years maturity, given the above information?