Consider the following a What is the duration of a two year bond that pays an annual coupon of 10 percent and whose current yield to maturity is 14 percent Use $ 1,000 as the face value b What is the expected change in the price of the bond if interest rates are expected to decline by 0 5 percent ...

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Consider the following. a. What is the duration of a two-year bond that pays an annual coupon

Question:

Consider the following.
a. What is the duration of a two-year bond that pays an annual of 10 percent and whose current yield to is 14 percent? Use $ 1,000 as the face value.
b. What is the expected change in the price of the bond if interest rates are expected to decline by 0.5 percent? 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...