Consider the following two bonds which make semiannual coupon payments a 20 year bond with a 6 coupon and 20 yield, and a 30 year bond with a 6 coupon and a 20 yield a For each bond, compute the price value of a basis point b For each bond, compute Macaulay duration c For otherwise identical bonds,...

b Let us start with part b because we already know the Excel function for the Macaulay duration DURA ...

Consider the following two bonds which make semiannual coupon payments: a 20 year bond with a 6%

Question:

Consider the following two bonds which make semiannual payments: a 20 year bond with a 6% and 20% yield, and a 30-year bond with a 6% and a 20% yield.
a. For each bond, compute the price value of a basis point.
b. For each bond, compute Macaulay duration.
c. "For otherwise identical bonds, Macaulay duration is increasing in time to maturity." Is this statement always true? Discuss. 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...