Question
A bond with $1,000 face value, 10% coupon, market interest rates of 5%, and three years to maturity. a. Calculate the duration of the bond
A bond with $1,000 face value, 10% coupon, market interest rates of 5%, and three years to maturity.
a. Calculate the duration of the bond
b. Assume that market interest rates increased to 7%, re-calculate the duration of the bond
c. Assume that the market interest rates decreased to 3%, re-calculate the duration of the bond
d. Comment generally on the relationships between the interest rates, coupon, and duration
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Managerial Accounting
Authors: James Jiambalvo
6th edition
9781119158226, 111915801X, 1119158222, 978-1119158011
