Find the Macaulay duration, Macaulay convexity, and (modified) convexity of a 20-year zero coupon bond assuming that the interest rate is 7% effective.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 14MC
Question
1
Find the Macaulay duration, Macaulay convexity, and (modified) convexity of a 20-year zero
coupon bond assuming that the interest rate is 7% effective.
Answer: 20 / 400 / 366.844
Transcribed Image Text:Find the Macaulay duration, Macaulay convexity, and (modified) convexity of a 20-year zero coupon bond assuming that the interest rate is 7% effective. Answer: 20 / 400 / 366.844
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