Question
1.a. Calculate the price and duration for the following bond when the going rate of interest is 4%. The bond offers 3.75% coupon rate, matures
1.a. Calculate the price and duration for the following bond when the going rate of interest is 4%. The bond offers 3.75% coupon rate, matures in 3 years and has a par value of $1,000. Show full calculations in the table below.
| YR | PV of $ 1 at 4% | Bond Cash Flows | PV (Cash Flows)
| Year * Present Value of Cash Flow |
| 1
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| 2
|
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|
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| 3
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|
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| 3
|
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Total
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|
|
|
|
Price =
Duration
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
