1) Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity, $1,000 par value, and a yield to maturity of 10%. Round your answer to three decimal places.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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1) Find the duration of a 6% coupon bond
making annual coupon payments if it has
three years until maturity, $1,000 par
value, and a yield to maturity of 10%.
Round your answer to three decimal
places.
2) A 30-year maturity, 8% coupon bond
paying coupons semiannually is callable
in five years at a call price of $1,100. The
bond currently sells at a yield to maturity
of 7% and has a par value of $1,000.
What is its yield to call? Enter your
answer as a decimal, rounded to four
decimal places.
(Hint: First compute the current price of
the bond based on YTM)
Transcribed Image Text:1) Find the duration of a 6% coupon bond making annual coupon payments if it has three years until maturity, $1,000 par value, and a yield to maturity of 10%. Round your answer to three decimal places. 2) A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call price of $1,100. The bond currently sells at a yield to maturity of 7% and has a par value of $1,000. What is its yield to call? Enter your answer as a decimal, rounded to four decimal places. (Hint: First compute the current price of the bond based on YTM)
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