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A 10-year, 10 percent annual coupon, $1,000 bond trades at a yield to maturity of 8 percent. The bond has a duration of 6.994 years.
A 10-year, 10 percent annual coupon, $1,000 bond trades at a yield to maturity of 8 percent. The bond has a duration of 6.994 years. What is the modified duration of this bond? What is the practical value of calculating modified duration? Does modified duration change the result of using the duration relationship to estimate price sensitivity
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Cases In Financial Management
Authors: I.M. Pandey
3rd Edition
0071333428, 978-0071333429
