You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 9.4 percent to 8.9 percent, the fair present value rose from $970 to $980. The bond pays interest annually. What is the duration of this bond? Assume annual payments. (Do not round intermediate calculations. Round your answer to 1 decimal place. (e.g., 32.1)) Duration of this bond years
You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 9.4 percent to 8.9 percent, the fair present value rose from $970 to $980. The bond pays interest annually. What is the duration of this bond? Assume annual payments. (Do not round intermediate calculations. Round your answer to 1 decimal place. (e.g., 32.1)) Duration of this bond years
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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Question
Bhupatbhai
![You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 9.4 percent to 8.9 percent, the
fair present value rose from $970 to $980. The bond pays interest annually. What is the duration of this bond? Assume annual
payments. (Do not round intermediate calculations. Round your answer to 1 decimal place. (e.g., 32.1))
Duration of this bond
years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F81d1b8f2-e8ad-48d1-8617-e5d891024289%2Ff3278e41-b37d-4cb4-aecc-507278172085%2Fkfmlhp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 9.4 percent to 8.9 percent, the
fair present value rose from $970 to $980. The bond pays interest annually. What is the duration of this bond? Assume annual
payments. (Do not round intermediate calculations. Round your answer to 1 decimal place. (e.g., 32.1))
Duration of this bond
years
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