Question
2. A bond with $1,000 face value, 6% coupon, market interest rates of %7, and three years to maturity. a. Calculate the duration of the
2. A bond with $1,000 face value, 6% coupon, market interest rates of %7, and three years to maturity.
a. Calculate the duration of the bond
b. Assume that market interest rates increased to 10%, re-calculate the duration of the bond
c. Assume that the market interest rates increased to 15%, re-calculate the duration of the bond
d. Comment generally on the relationships between the interest rates, coupons, and duration
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An Introduction to Investment Banks, Hedge Funds, and Private Equity
Authors: David P. Stowell
1st edition
978-0123745033, 0123745039, 978-9380931074
