32.) A bond that has an annual coupon rate of 15% has two years to maturity. If the current discount rate is 8%, what is the bond's duration? Duration calculation: I 1. Compute the present value of each individual cash flow 2. Sum these individual present values to find price 3. Find the percentage contribution (to price/PV) of each individual component cash flow 4. Multiply the percentage contributions by the period (in the future) when these cash flows occur 5. Sum up the 'weighted' contributions from 4.) above - THIS IS DURATION! Year CF PV % weighte d 12 1 150 138.89 12.35% 0.12 2 1150 985.94 87.65% 1.75 1124.8 Price 3 Duratio n 1.88 years