10. A corporate bond has a coupon rate of 7% and pays coupons semiannually, with the next coupon to be paid in six months. The bond’s face value is $1,000; its stated annual yield to maturity (BEY) is 6%; and it matures in 2 years. Calculate the bond's duration (in years). a. 1.75 years b. 1.80 years c. 1.85 years d. 1.90 years e. 1.95 years

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
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Chapter4: Bond Valuation
Section: Chapter Questions
Problem 7P: Bond Valuation with Semiannual Payments Renfro Rentals has issued bonds that have a 10% coupon rate,...
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10. A corporate bond has a coupon rate of 7% and pays coupons semiannually, with the next
coupon to be paid in six months. The bond’s face value is $1,000; its stated annual yield to
maturity (BEY) is 6%; and it matures in 2 years. Calculate the bond's duration (in years).
a. 1.75 years
b. 1.80 years
c. 1.85 years
d. 1.90 years
e. 1.95 years
Transcribed Image Text:10. A corporate bond has a coupon rate of 7% and pays coupons semiannually, with the next coupon to be paid in six months. The bond’s face value is $1,000; its stated annual yield to maturity (BEY) is 6%; and it matures in 2 years. Calculate the bond's duration (in years). a. 1.75 years b. 1.80 years c. 1.85 years d. 1.90 years e. 1.95 years
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