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Consider a bond with a face value of $1,000, an annual coupon rate of 6%, a...

Consider a bond with a face value of $1,000, an annual coupon rate of 6%, a yield to maturity of 8%, and 10 years to maturity. The bond's duration is?

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Answer #1
YTM 8.00%
Time Cash flow PV of Cash flow PV*Time
1 60 55.56 55.55555556
2 60 51.44 102.8806584
3 60 47.63 142.8898034
4 60 44.10 176.4071647
5 60 40.83 204.1749591
6 60 37.81 226.8610657
7 60 35.01 245.065966
8 60 32.42 259.3290646
9 60 30.01 270.1344423
10 1060 490.99 4909.850974
Total 865.80 6593.149653
Bond Duration 7.62 (=6593.149653/865.80)

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