What is the bond's duration in years? Information from prior You see a five-year bond trading in the market with the following characteristics: $1,000 face value, 9% coupon with 5 years to maturity. Assume market interest rates are 8.5% and that coupon payments are annual.
What is the bond's duration in years? Information from prior You see a five-year bond trading in the market with the following characteristics: $1,000 face value, 9% coupon with 5 years to maturity. Assume market interest rates are 8.5% and that coupon payments are annual.
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
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What is the bond's duration in years?
Information from prior
You see a five-year bond trading in the market with the following characteristics: $1,000 face value, 9% coupon with 5 years to maturity. Assume market interest rates are 8.5% and that coupon payments are annual.
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Duration of bond show the sensitivity of bond prices to change in interest rates.
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