A 4-year bond pays an annual coupon of 10.5% based on a $1,000 par value and...
A 4-year bond pays an annual coupon of 10.5% based on a $1,000 par value and is selling to yield 7.5%. Use the excel duration function to determine the point in time when the bond's payment stream equals one-half the present value of cash flows.
a) Write the excel function entered.
b) Write the inputs into the excel function.
c) Duration =
Homework Answers
Part (a) Excel function entered = Duration (Settlement, maturity, Coupon, yield, frequency, basis)
Part (b) Inputs: Settlement: 4/20/2019; Maturity: 4/20/2023, Coupon: 10.5%, Yield: 7.5%, Frequency: 1, Basis: 0
Part(c) Duration = 3.49 years
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