10. Calculate duration on a $400, four-year 10% coupon bond when its interest rate is 10%. (20p) Cash Payment (Zero Coupon Bonds) $ Year Present Value (PV) of Cash Payments (i= 10%) $ Weights (% of total) PV/$590.88 Weight maturity (1*4)/100 1 100 15.3 0.153 1 2 2 100 82.64 13.9 0.278 3 100 4 100 68.30 0.460 4 400 273.97 46.3 1.852 Total 590.88 100