Homework Answers
Calculating Bond Price,
Using TVM Calculation,
PV = [FV = 1,000, PMT = 80, N = 3, I = 0.10]
PV = $950.26
Duration = [1(80)/(1.10) + 2(80)/(1.10)2 + 3(1,080)/(1.10)3]/950.26
Duration = 2.78 years
Duration of 3 year Zero Coupon Bond = 3 years
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