A bond currently sells for $1,140, which gives it a yield to maturity of 7%. Suppose...
A bond currently sells for $1,140, which gives it a yield to maturity of 7%. Suppose that if the yield increases by 30 basis points, the price of the bond falls to $1,120. What is the duration of this bond? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Homework Answers
Percentage change in price =-Duration*Change in yield
(1120-1140)/1140=-Duration*0.30%
Duration of this bond =1.7544%/0.30% =5.8480
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