A bond has just been issued. The bond has an annual coupon rate of 12% and coupons are paid annually. The bond has a face value of $1,000 and will mature in 20 years. The bonds yield to maturity is 14%.

a.Using Excels Data Table feature to construct a Two-Way Data Table to demonstrate the impact of the coupon rate and the time to maturity on the bonds duration using:

i. Coupon Rates of 0%, 6%, 12%, and 18%.

ii. Maturities of 5 years, 10 years, 15 years, and 20 years.

b. What duration principles are demonstrated in this table?

c.How could investors apply these duration principles to make bond investment decisions?