An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest

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An insurance company is analyzing the following three bonds, each with five years to maturity, annual interest payments, and is using duration as its measure of interest rate risk: (LG 3-6)

a. $10,000 par value, coupon rate = 8%, rb = 0.10

b. $10,000 par value, coupon rate = 10%, rb = 0.10

c. $10,000 par value, coupon rate = 12%, rb = 0.10 What is the duration of each of the three bonds?

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Financial Markets And Institutions

ISBN: 9781259919718

7th Edition

Authors: Anthony Saunders, Marcia Cornett

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