(10 points) b) Calculate the duration of a bond with the following characteristics by using the template in Excel face value $1000, 8 year bond with coupon rate 9 , yield to maturity 9 DURATION AND CHANGING THE COUPON RATE YTM Coupon rate Face value new coupon YTM Coupon rate Face value CA PriceA (1 YTM) t CA PriceA (1 YT M) Year CtA Year 1 Bond price Duration 1004 1004 Bond price Duration 1004 1004

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(10 points) b) Calculate the duration of a bond with the following characteristics by using the template in Excel face value = $1000, 8 year

(10 points) b) Calculate the duration of a bond with the following characteristics by using the template in Excel

face value = $1000, 8 year bond with coupon rate=9%, yield to maturity = 9%

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DURATION AND CHANGING THE COUPON RATE YTM Coupon rate Face value new coupon YTM Coupon rate Face value CA/ PriceA*(1+YTM) t"CA/ PriceA*(1+YT M) Year CtA Year 1 Bond price Duration 1004 1004 Bond price Duration 1004 1004

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