Consider the following. a. What is the duration of a five-year Treasury bond with a 10 percent

Question:

Consider the following.
a. What is the duration of a five-year Treasury bond with a 10 percent semiannual selling at par?
b. What is the duration of the above bond if the yield to (ytm) increases to 14 percent? What if the ytm increases to 16 percent?
c. What can you conclude about the relationship between duration and yield to

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...