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?

AppendixLO1