You have the following information on two bonds Bond 1 Bond 1 Type Coupon Zero Coupon Term (Yrs) 3 3 Payment Frequency Annual Annual Face Amount ($) $25,000 $25,000 Coupon ( ) 6 NA a Calculate the duration of Bond 1 if current yields are 7 b What happens to Bond 1 's duration if yields are 5 c Calc...

a To calculate the duration of Bond 1 we need to first calculate the present value of all the cash f ...

You have the following information on two bonds Bond 1 Bond 1 Type Coupon Zero Coupon Term

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You have the following information on two bonds

	Bond 1	Bond 1
Type	Coupon	Zero Coupon
Term (Yrs)	3	3
Payment Frequency	Annual	Annual
Face Amount ($)	$25,000	$25,000
Coupon (%)	6%	NA

a. Calculate the duration of Bond 1 if current yields are 7%?

b. What happens to Bond 1's duration if yields are 5%?

c. Calculate the duration of Bond 2 with a current yield of 6%?

Related Book For answer-question

Contemporary Financial Management

ISBN: 9780324289114

10th Edition

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

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Posted Date: Mar 28, 2023 02:00 AM

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You have the following information on two bonds Bond 1 Bond 1 Type Coupon Zero Coupon Term

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a To calculate the duration of Bond 1 we need to first calculate the present value of all the cash f... View the full answer

Contemporary Financial Management

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