Calculate the duration of a bond with two years to maturity, 7% coupon, 8.2% yield and...
Calculate the duration of a bond with two years to maturity, 7% coupon, 8.2% yield and pays semiannually.
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1.89 years |
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1.82 years |
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1.9 years |
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3.8 years |
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None of the above |
Homework Answers
| Year | Cash Flow | PV Factor | PV Of Cash Flow | Weight of cash flow | Weight * Year |
| a | b | c=1/1.07^a | d=b*c | e=d/1021.70 | |
| 1 | $ 82.00 | 0.93458 | $ 76.64 | 0.0750 | 0.0750 |
| 2 | $ 1,082.00 | 0.87344 | $ 945.06 | 0.9250 | 1.8500 |
| Total | $ 1,021.70 | 1.000 | 1.9 |
| Macaulay Bond Duration =1.9 years | ||
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