You have just been given the following bond portfolio: Bond Maturity (yrs) Coupon rate (%) Holdings ($ million) 7.00 10 7.25 20 10 7.50 20 20 8.00 10 Coupons are paid semi-annually. The current yield curve is flat at 6%. (a) What is duration for each of the bonds in your portfolio? 25 ABCD

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
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Answers are : A = 1.97, B = 4.61, C = 8.35, D = 14.13

Please show step by step calculation with formulas

You have just been given the following bond portfolio:
Bond Maturity (yrs) Coupon rate (%) Holdings ($ million)
7.00
2
10
5
7.25
20
10
7.50
20
20
8.00
10
Coupons are paid semi-annually. The current yield curve is flat at 6%.
(a) What is duration for each of the bonds in your portfolio?
ABCD
Transcribed Image Text:You have just been given the following bond portfolio: Bond Maturity (yrs) Coupon rate (%) Holdings ($ million) 7.00 2 10 5 7.25 20 10 7.50 20 20 8.00 10 Coupons are paid semi-annually. The current yield curve is flat at 6%. (a) What is duration for each of the bonds in your portfolio? ABCD
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