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
Section: Chapter Questions
Problem 1PS
Related questions
Question
How do I determine the duration of a bond
Expert Solution
Duration:
It is an object used in bond valuation to determine the sensitivity of the bond. High duration comes with high probability of interest rate risk while in lower duration there is low risk of interest rate fluctuation.
Bond Duration Calculation:
The simplest way to find the duration of a bond is by using a excel spreadsheet and a excel functions =DURATION and -MDURATION.
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