Compute the modified duration for a 15-year zero-coupon bond having a yield to maturity of 9.5%....
Compute the modified duration for a 15-year zero-coupon bond having a yield to maturity of 9.5%.
Please show steps.
Answers:
a. 15.00
b. 13.70
c. 14.35
d. 15.34
e. 15.17
Homework Answers
Modified Duration for a zero coupon bond equals its maturity. So here
Duration = 15 years
Modified Duration = Duration/(1+YTM)
= 15/1.095
= 13.70 years
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Compute the modified duration for a 15-year zero-coupon bond
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